June 16, 2005


Senate Gives Ethanol an Added Boost: Farm-state lawmakers push through a measure to double the amount in the gas supply by 2012. The potential effect on prices is unclear. (Richard Simon and Warren Vieth, June 16, 2005, LA Times)

For years, Congress has showered tax breaks on ethanol, portraying the fuel that is derived mostly from corn as a homegrown alternative to oil imports.

But even the Corn Belt could not have imagined its good fortune Wednesday as the Senate voted to double the amount of ethanol, to 8 billion gallons, that must be added to the nation's gasoline supply by 2012.

"The Senate is poised to make ethanol a cornerstone of America's energy policy," said Sen. John Thune, a Republican from ethanol-producing South Dakota.

The provision was added on a 70-26 vote to a far-ranging energy bill moving through the Senate. It is widely regarded as critical to getting Congress to adopt a new national energy policy, a priority of President Bush's. [...]

Bush applauded efforts to boost the ethanol requirement, saying it was a key element of a broader strategy to reduce the nation's dependence on foreign oil. "We're pretty good about growing corn here in America, and we've got a lot of good corn growers," he told industry officials at an energy efficiency conference in Washington.

Bush said he looked forward to the day when a future president would say, "Show me the crop report," instead of asking, "How many barrels of crude oil are we importing?"

Although he did not endorse a specific amount, Bush said it was important for Congress to approve a renewable fuel standard requiring a minimum amount of ethanol and biodiesel, which can come from soybeans as well as recycled waste products such as cooking grease.

The president prodded the Senate to set aside partisan politics and pass an energy bill quickly, saying the public's patience, not to mention his own, was wearing thin.

"My advice is, they ought to keep this in mind: Summer is here, temperatures are rising, and tempers will really rise if Congress doesn't pass an energy bill," Bush said.

Bush's call for action reflected a more confrontational approach than his past public comments on presidential priorities that stalled in Congress.

Sen. Tom Harkin (D-Iowa) called the ethanol mandate something "we've been waiting for for a long time," and warned that if the provision was stripped out during House-Senate negotiations on a final bill, "there won't be an energy bill, period."

The energy bill passed by the House in April would require that 5 billion gallons of renewable fuel be added to gasoline by 2012, virtually assuring that an ethanol mandate of some amount would be in the final version of the legislation. [...]

Sen. John McCain (R-Ariz.) also complained about additional government support for the ethanol industry. "How much is enough?" he asked after voting against the measure.

Looks like he'll skip the Iowa caucuses again.

Posted by Orrin Judd at June 16, 2005 6:24 AM

And, when he discarded his long standing opposition to ethanol a few weeks ago, George Allen might as well have gone ahead and filed the papers for the Iowa caucus.

Posted by: Dan at June 16, 2005 9:41 AM

Which he could win, but then losing in NH will be a blow, one that a Bush could recover from but not likely an Allen.

Posted by: oj at June 16, 2005 9:45 AM

Looks like he won't be running for President. Let's give him credit, though. McCain is absolutely right about this.

Posted by: David Cohen at June 16, 2005 9:48 AM

He skipped Iowa last time too because of ethanol--won't hurt him in NH.

Posted by: oj at June 16, 2005 9:55 AM

It is no longer the sugar teat of the federal government, it is the corn teat of the federal government.

Posted by: pchuck at June 16, 2005 11:02 AM

Has anyone shown that use of ethanol reduces our dependence on oil? Last I heard, the overall energy budget for ethanol use was negative, meaning the more ethanol in use, the more energy needed from other sources. And of course, if the net budget is negative then it's not in fact renewable either.

Posted by: Annoying Old Guy at June 16, 2005 11:18 AM

You've been telling us that Romney is going to win New Hampshire.

Posted by: David Cohen at June 16, 2005 12:06 PM

He will if McCain doesn't run.

Posted by: oj at June 16, 2005 12:13 PM

The Iowa caucus, a non-binding straw poll of people who actually want to go outdoors on a cold, snowy Iowa evening, is a complete waste of time. It would behoove McCain to announce that he has no intention of wasting his time there and will devote his energies to places where voters actually make real decisions that really count.

Posted by: bart at June 16, 2005 12:38 PM

AOG - I believe substituting ethanol for gasoline does reduce oil imports. The energy consumed by ethanol production derives from more efficient sources, like electric utilities, and ethanol substitutes for inefficient sources, like car engines.

Posted by: pj at June 16, 2005 12:53 PM


Also, it cannot be shown that ethanol requires more energy to produce than it supplies.

Both conclusions have studies to back them up.

It rather depends on what assumptions one makes when computing the factors that comprise ethanol production.

One definitive fact is that each net surplus BTU of ethanol costs more to produce than any oil field now in production, including the Canadian tar sands.

Posted by: Michael Herdegen at June 17, 2005 5:00 AM