Shucking the 'Corn Lobby' on Ethanol
Corn, at a new record high of more than $6 a bushel. Oil, selling at record prices - $115 a barrel.
MELISSA BLOCK, host:
NPR's senior news analyst Ted Koppel says those prices are likely to get higher, but alternative energy may not be the cheaper answer.
KOPPEL: Back in the early '70s, when the oil-producing countries hit us with an embargo, we talked about developing alternate energy. It wouldn't be economical at first, we understood that, but once the price of oil hit $50 a barrel, well, we'd be liquefying and gasifying coal, we'd be heating all our homes with solar energy. The nation would be running on ethanol.
Not quite. Although, the ethanol part has taken an interesting turn or two. The reason that corn is trading at such a high price is that so much of it now is being used to create ethanol. By some estimates, ethanol plants in this country will consume close to half the corn grown in America within the next few years. That means that America's role as one of the world's major exporters of food will experience a commensurate drop. Could we be a lot further along than we are, developing ethanol from other sources? You bet. Ethanol doesn't have to be made out of corn. Biofuels can be generated from grasses and woodchips. But the U.S. government hasn't funded the necessary research and development, and that's due, in large measure, to lobbying by American corn and soybean producers.
There are no tariffs on imported oil, that's why we buy and use so much of it. But there is a 54-cent-per-gallon tariff on Brazilian ethanol, which is made from sugarcane and is much cheaper than American ethanol. Why the tariff? Again, political pressure from US corn and soybean producers to protect their profits. When you consider that China and India will make as many cars as the U.S. in another decade or two, you can just imagine what the competition for energy and food is going to be like. You don't need to be an expert on agribusiness. If there's a cheaper way of producing alternate energy without gobbling up one of the world's major food sources, shouldn't we be taking a closer, more determined look?
This is Ted Koppel.