BuckeyeBlog

The bankruptcy of an Allen County ethanol plant illustrates a variety of problems with government intervention in the market. The only reason ethanol is being used as fuel is because the farm lobby (which benefits from having another market for corn) and the environmental lobby (whose hatred of fossil fuels blinds them to scientific facts) teamed up to convince federal and state governments to promote ethanol usage. Of course, this push for ethanol ignores the fact that it is bad for car engines, environmentally destructive, and may have raised the cost of food, thus contributing to food riots around the world.

These facts were ignored by policymakers because they like to appease farmers and appear environmentally-friendly. So there was a push at the state level (in Ohio and many other states) to use taxpayer money to invest in ethanol plants. Now those plants are going bankrupt. The one that went bankrupt in Allen County cost taxpayers $1 million.

When you have governmentally-directed “economic development” strategies, this thing is inevitable. Sure, in a free market situation there are plenty of products that fail. But there is no way that a product like ethanol, which has so many flaws, would still be produced unless the government was offering such absurdly high incentives for its production and mandating its usage. And when private business ventures fail, it is businessmen and investors who lose money, not taxpayers.

The ethanol boondoggle should be a sobering lesson for all those who want the government to promote “green technology.”

During election season you hear a lot of hot air about “energy independence.” Usually politicians proclaim that we need to increase our use of biofuels, especially ethanol, to help us achieve this mythical goal. The folks at Reason magazine have produced a short video explaining why this is a horrible idea (unless, of course, you are a corn farmer):

In anticipation of the upcoming Senate debate over the Warner-Lieberman climate change bill, the Cato Institute’s Patrick J. Michaels has an excellent analysis of its problems:

Senate Bill 2191, the “Climate Security Act”, sponsored by Joe Lieberman (I-CT) and John Warner (R-VA) will be debated by the Senate next week. It’s going to cost trillions and do nothing measurable about climate change in the foreseeable future. Maybe it should be named the “Economic Insecurity Act” of the 21st Century.

Lieberman-Warner mandates that we reduce our emissions of carbon dioxide—the major human “greenhouse” emission—to 2005 levels by the year 2012. They’ve risen an average of 1% per year since 1990, depending upon the weather (in cold years we use more energy to heat our homes) and our economy. Not surprisingly, the more it grows, the more carbon dioxide is emitted. That’s a screaming red flag about what S. 2191 will do for our prosperity.

The 2012 target is nothing compared to its long-term goals, which are a 15% reduction below 2005 levels in 2020, growing year-by-year to a 70% reduction in 2050.

No one — including Lieberman-Warner’s proponents — has a clue how to achieve such a change in our energy system. There simply is no known, workable suite of technologies available. But it could become law. Welcome to Washington.

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Coming from a logging family, I was heartened to see an editorial in Investor’s Business Daily that pointed out the environmental benefits of logging. Having grown up around the timber harvesting industry, I know that many of the environmental harms that are blamed on logging are overblown.

But this author says that a way to combat climate change is to cut more trees:

In the green scheme of things, trees are a good thing and deforestation is bad. We must plant as many trees as we can to suck up all that CO2, the pollutant that sustains all plant and therefore all animal life on earth. Old-growth forests must be protected from those nasty loggers.

Trouble is, according to Thomas Bonnicksen, professor emeritus of forest science at Texas A&M University, forests left in “pristine” condition have too many trees and too many dead ones, both of which provide fuel for the devastating forest fires that ravaged California last year.

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