- If all the corn produced in America last year were dedicated to ethanol production (14.3 percent of it was), U.S. gasoline consumption would drop by 12 percent. For corn ethanol to completely displace gasoline consumption in this country, we would need to appropriate all U.S. cropland, turn it completely over to corn-ethanol production, and then find 20 percent more land for cultivation on top of that.
- According to a 2005 report issued by the Agriculture Department, corn ethanol costs an average of $2.53 to produce, or several times what it costs to produce a gallon of gasoline. Without the subsidies, costs would be higher still. A study last fall from the International Institute for Sustainable Development found that ethanol subsidies amount to $1.05-$1.38 per gallon, or 42 percent to 55 percent of ethanol’s wholesale market price.
- At best, E10 reduces greenhouse gas emissions by from zero to 5 percent; pure ethanol by 12 percent. The International Energy Agency, however, estimates that it costs about $250 to reduce a ton of greenhouse gases this way, or more than 10 times what Yale economist William Nordhaus thinks is economically sensible given the economics of climate change. Ethanol as an anti-warming policy is what academics refer to as “crazy talk.”
Just a couple points from CATO, [1] this morning.