Monday, January 22, 2007

The New Tax to Support Corn Farmers: Ethanol

Ok, so I know a lot of me may flame me for not having some hard evidence in this, but I am sure there is a lot out there if you do the research. This just one issue that really, really, really bugs me...

Ethanol has been all the rage for quite a while now. In fact, some states are now requiring gasoline to have a minimum ethanol content. For example, a few months ago Virginia started requiring something like 10% ethanol in the gasoline mixtures. Unfortunately, this really ends up being more of a tax than anything else. Why?

Most ethanol in the US is made from corn, which is (to start with) highly government subsidized - it keeps the cost of corn low; but the problem is we make so much corn we don't know what to do with it. So, instead of bringing down the price (as that would hurt the farmers further), they decided to make it into fuel - ethanol - and there are a number of factories starting up to convert corn into fuel. This sounds good and all, until you consider how efficient corn-based ethanol is, at least when mixed with regular gasoline.

From my own, personal experience - ethanol is the worst thing I can put into my car. While adding it does bring the price of a gallon of gas down, say from $2.50 to $2.00 (or really liberally $1.50), it increases the consumption of gas by my car by nearly 2 - so for every gallong of gas that I was using, I am now using nearly two gallons. Thus, that gallon now costs me $4.00 (or $3.00 on the liberal), an increase of $1.50 (or $0.50 on the liberal). Not only that, but in increase the emissions of the vehicle similarly.

Now, figure this - the state is taking a cut on every gallon for (i) sales tax, (ii) taxes for use on the roads, and many other taxes for other things therein related. And then big oil takes it cut per gallon, as well as all the costs for production and distribution, and finally the station gets its miniscule $0.02 cents per gallon. So, all those cuts now get doubled by simply adding in a little ethanol. Everyone is richer except the consumer...*cough* customer *cough*. And they wonder why the American public is so concerned about the cost of a gallon.

Me - I want my hybrid that I can plug into an outlet and perhaps never use a gallon of gas with unless I chose to. But that's another time.

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