Ethanol Boosters Are Refreshingly, but Depressingly, Honest About What They Hope to Accomplish With Expanded Mandates


An employee holds a gas pump to refill a car at a petrol station in central Seoul April 6, 2011. REUTERS/Lee Jae-Won

No good product that is truly useful to, or desired by, the public needs to be mandated by the government. There is no need to require that citizens consume Coca-Cola or by iPhones. We purchase those products voluntarily, because we want them.

It speaks volumes about the merits of ethanol that its producers must rely on government fiat to manufacture demand.

What’s interesting, however, is that proponents of ethanol have begun to admit that the fuel doesn’t really exist to serve fuel consumers. It’s really just about eating up crops. Case in point this argument from the North Dakota Farmer’s Union, part of a national campaign pushing for expanded ethanol blend mandates in our fuels, wherein the justification for the expansion is a surplus of corn.

From the Bismarck Tribune (emphasis mine):

Right now, there is a large surplus of corn in the country — 2 billion excess bushels — a level Clemens said would be much higher if not for the evolution of ethanol. On his farm, he has gone from 100-bushel averages to more than 150 bushels per acre average and yields are only likely to continue to improve as production rises 2 percent to 5 percent annually.

“We have to find a home for these surpluses,” said [North Dakota Farmers Union President Mark] Watne, adding that only a major weather event, such as droughts in 2011 and 2012, can solve in the current market.

“Farmers are not making money. We don’t want farmers going broke,” said Watne, whose organization is looking for ways to create demand.

I want farmers to make money as much as the next guy. Agriculture is the foundation of North Dakota’s economy.

That said, we shouldn’t be looking to build a market for corn crops on top of artificial demand for ethanol conjured by government policy. It’s terribly short sighted.

Not only is it perilous to inflate demand for corn by turning into a fuel nobody really wants, but it makes our agriculture economy even more dependent on the vagaries of politics. That might be good for business if you’re a political group the North Dakota Farmer’s Union, but it would seem to me that independence from the shifting sands of Washington D.C. would be a better situation for actual farmers.

What ethanol proponents are trying to create is a self-licking ice cream cone. They want to drive up crop prices by creating artificial demand for corn through ethanol mandates.

They’re building a house of cards that will one day fall.