Obama is coming to town! Since I live in New Hampshire, that also means that Obama is going to run for President. (I suppose Obama might also just have a soft spot for Manchester. . .)
So what am I going to ask Obama about? I’ve already confessed to a serious man-crush, but I’m dismayed by Obama’s position on the sugar ethanol tariff. For those who don’t know, the U.S. government currently taxes the importation of ethanol produced from sugar. This tariff is supported by both the domestic sugar industry – our sugar prices are twice the international average – and Midwestern corn farmers, who like having a monopoly on ethanol production.
The bad news is that it’s much more efficient to produce ethanol from sugar than corn. As James Surowiecki noted in the New Yorker:
Corn ethanol’s “net energy balance”–the amount of energy it yields in proportion to how much energy goes into its production–is significantly lower than that of other alternatives, and modern corn farming isn’t easy on the land. By contrast, ethanol distilled from sugarcane is much cheaper to produce and generates far more energy per unit of input–eight times more, by most estimates–than corn does. In the nineteen-seventies, Brazil embarked on a program to substitute sugar ethanol for oil. Today, every gallon of gas in Brazil is blended with at least twenty per cent of ethanol, and many cars run on ethanol alone, at half the price of gasoline.
What’s stopping the U.S. from doing the same? In a word, politics. The favors granted to the sugar industry keep the price of domestic sugar so high that it’s not cost-effective to use it for ethanol. And the tariffs and quotas for imported sugar mean that no one can afford to import foreign sugar and turn it into ethanol, the way that oil refiners import crude from the Middle East to make gasoline. Americans now import eighty per cent less sugar than they did thirty years ago. So the prospects for a domestic-sugar ethanol industry are dim at best.
Unfortunately, our politics shows little promise of changing anytime soon. Although the Bush Administration recently proposed scrapping the sugar tariff, Congress won’t budge. One of the senators supporting the sugar tariff is Barack Obama. When he comes to New Hampshire, I’m going to ask him why. I hope he can come up with a better answer than trying to appease voters in the Iowa caucus.