Minor Thoughts from me to you

Recently, Congress has been going nuts over ethanol production. Government money has been thrown at every imaginable ethanol-related project.

If the current tax credits, grants and loan guarantees are extended, the package would cost taxpayers an additional $140 billion over the next 15 years. New proposals under consideration in Congress could raise the tab to $205 billion.

The biggest single item would be an extension of an existing 51-cent-a-gallon ethanol tax credit, scheduled to expire in 2010. It would cost the federal government an extra $131 billion through 2022 under a fuel mandate that recently cleared by the Senate Energy and Natural Resources Committee. (It would cost $18.36 billion in 2022 alone.)

Besides the ethanol tax credit, other current incentives include a $1-a-gallon biodiesel tax credit, a subsidy for service stations that install E85 pumps, spending by the Agriculture Department on energy programs, and various other Energy Department grants and loan guarantees.

Some lawmakers want to provide aid for ethanol infrastructure since ethanol is too corrosive to be transported through existing gasoline pipelines. ... Another bill would establish a Strategic Ethanol Reserve for years when corn harvests were reduced by droughts. ... a House Agriculture subcommittee approved a proposed new energy provision that would provide $2 billion in loan guarantees for new biomass plants and $1.5 billion for research into cellulosic ethanol technologies.

The only problem -- nobody's quite sure how to pay for any of this. Especially as Democrat presidential candidates are proposing billions in new healthcare and education spending. All of those billion have to come from somewhere, but Democrats have been pledging to keep the budget balanced. Obviously, those are code words for "hike taxes on the rich to pay for our new toys", but even tax hikes on the rich only go so far. After all, how many separate billion dollar toys can repealing the tax cuts for people who earn $200,000+ really pay for?

As always, the best quote is saved for the end of the article.

Rep. Tim Holden, D-Pa., who chairs the House Agriculture subcommittee dealing with energy, contended that "we need a Manhattan Project ... we need to be less dependent on energy."

Less dependent on energy? As in, the entire nation should start using less energy? How? Ban air conditioning? Ban driving? Mandate thermostat limits in the winter? Take away our iPods, cellphones, laptops, and digital cameras?

I'm afraid Representative Holden is a bit nuts. As are all of these energy subsidies. Knock it off. When an innovator finally comes up with a better, cheaper way to produce energy, the world will stampede to his doorstep. Until then, quit throwing tax money at the problem. None of you idiots in Congress know how to produce energy any more efficiently, so stop using my money to pretend like you're making good investments.

You're worse than a trust-fund teenager taking Daddy's stock portfolio for a test drive. Knock it off already.

UPDATE: Not only that, but the rush to invest in ethanol could lead to a food shortage down the road:

A recent study conducted by the Center for Agricultural and Rural Development at Iowa State University (which receives funding from grocery manufacturers and livestock producers) reported that U.S. ethanol production could consume more than half of U.S. corn, wheat and coarse grains by 2012, driving up food prices and causing shortages. The study estimates that booming ethanol production has already raised U.S. food prices by $47 per person annually. In Mexico, protests have already erupted over the high price of corn tortillas, a staple food in the local diet.

Planting more corn is one solution, but that means planting less of other crops that are also widely used in foods, such as soybeans and wheat. Tilling fallow land could create more growing space for corn, but might lead to soil erosion and impacts on wildlife habitats.

According to a December 2006 study by the International Food Policy Research Institute, producing enough ethanol to fuel all of the world's vehicles would require five times more corn than is planted today and 15 times as much sugar cane.

So. Ethanol investment isn't just a waste of taxpayer dollars. It could also have some very detrimental effects on agricultural production, land management, and food prices. Quit distorting the market and have the patience to let a level playing field reveal the next energy technology. Please.