The Frontal Cortex

Obama, Detroit and Ethanol

Obama gave a good speech yesterday, outlining his plan to save Detroit from itself. He would basically force the Big Three (really the Shrinking Two) to invest in fuel efficient vehicles that run on alternative fuels*:

Obama proposed that the government pay for 10 percent of domestic automakers’ health-care costs for retired workers through 2017 if the firms plow half the savings into equipment for making more efficient cars and trucks. Obama’s campaign estimates that this would cost taxpayers roughly $7 billion over the next 10 years.

That said, I’d feel better about Obama’s plans if he wasn’t a leading supporter of the tariff on Brazilian ethanol derived from sugar. (There is a tariff of fifty-four cents per gallon on sugar-based ethanol from foreign sources.) Instead, Obama supports nurturing a “home grown ethanol industry,” which means massive subsidies for corn farmers. While that sounds nice in the abstract, it’s up against the brute facts of botany: ethanol distilled from sugarcane is much cheaper to produce and generates far more energy per unit of input–about eight times more, according to most estimates–than corn. And because we also impose tariffs on imported sugar – the sugar lobby is almost as powerful as the corn lobby – it’s not economical to develop a domestic ethanol industry based on sugar cane. It’s as if Congress has decided that supporting the corn farmers with massive agricultural subsidies is more important than 1) developing alternative fuels that are better for the environment and help prevent global warming 2) wean us off our dependence on foreign oil and 3) help support development in poor countries that grow sugar.

I appreciate Obama’s tough talk to Detroit, but I wish he was equally willing to talk tough to the corn farmers of Illinois.

*The one part of his plan that’s stupid is the part that will extend the tax subsidy for hybrid vehicles beyond the current 60,000 car cap. This is really an expensive tax break for the upper class. I see no reason to give $3000 of public money to the owner of Lexus SUV hybrid. As I’ve argued before, diesel engines are a much more cost-effective means of reducing emissions and increasing fuel-efficiency than hybrid engines, at least until battery technology improves.


  1. #1 tony
    May 9, 2007

    I agree wholeheartedly…

    Sugar is smart – corn is stupid…. (but the corn farmers are looking for an alternative market, what with the backlash against high-fructose corn syrup, and all…)

    Also – I agree that diesel is a much better fuel.

    I’d buy a diesel in a minute if only I could find a pump closer than the local interstate! My wife & I always had diesels when we lived in the UK, and also owned a diesel when we lived in Switzerland recently.

  2. #2 Laura
    May 9, 2007

    Last week’s New Yorker featured a lengthy article about Obama, part of which featured him discussing alternate sources of ethanol with Illinois corn farmers. Techniques for extracting ethanol from high-cellulose plant matter (various grasses, etc.) are quickly developing (there was a bit about them in a recent Nature podcast), which would make ethanol crops easier to grow, and could save arable farm land for the food supply rather than the fuel supply.

  3. #3 rat-terrier
    May 9, 2007

    No, the calculus goes: imported energy dependence, stupid and immoral; energy independence, smart and just-might-save-the-republic.

    Anyone who wants to trade a Brazilian pusher for an Arabian one has failed to recognize how badly we’ve prostituted ourselves, and how many scumbags we’ve climbed into bed with these last thirty years. All for that hit of energy…

    What, you want eventual military entanglement in the cane producing countries?

    What ever happened to standing on our own feet, not beholden to dictators, juntas, warlords, and pimps like Exxon-Mobil?

    The entire energy production chain must belong to us, so that we can at least attempt to govern it ethically, and so that we arenít shackled with artificial national interests that prompt us to do terrible things. A doable home-grown solution is far better than the most efficient solution, if efficiency means foreign dependence.

  4. #4 biofuelsimon
    May 10, 2007

    I can see that the farming lobby probably pays a considerable amount of money to politicians campaign funds and that as you need a lot of money to become president its very welcome. But you also need a lot of votes in the right states.
    There are many more drivers in the US than there are farmers, right, and they all have votes, so why not have a policy for them that would allow them to decide which fuel ethanol to buy expensive locally produced stuff or cheaper stuff from overseas.
    And while we’re at it give tax breaks to people who either don’t own cars or drive very few miles/year…
    You can check out some of the possible effects of a big switch to ethanol in the Big Biofuels Blog.

  5. #5 Daniel
    May 10, 2007

    I think ethanol produced from agricultural products will not and cannot solve our energy demands, because our energy demands are flamboyantly glutinous and out of control.

    It is like planning food for a party: how much food should I provide? as much as they can eat; how much can they eat? as much as I can provide.

    If we can reduce our demand for fossil fuel, and if we can transfer some of the supply to agriculturally based ethanol, the price of oil from the Middle East and elsewhere might moderate, or even go down. These things, together, would help.

    There are all kinds of smart ideas on how to increase energy efficiency in automobiles. But the best and easiest one to implement is just make the cars smaller. Do we really need to be driving these tanks?

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