The Ethanol Papers - Paperturn manuscript - Flipbook - Page 306
After a hundred-plus years of government support and subsidized funding to
the oil/gasoline industry, it’s absurd to think that an under-funded fuel/energy
alternative of any kind could compete with gasoline without significant government assistance. The benefits of developing a domestic alt-fuel industry that
causes less pollution and frees us from external forces make the effort worthwhile, even if it was no more economical than petroleum oil fuels. In order for
private investors to produce ethanol in the quantity that it needs to retire gasoline, the investors and the alt-fuel industry need the same government intervention that was used to make oil/gasoline the primary fuel. It’s time to level the
playing field.
2. You wrote, “If ethanol is not economically competitive with gasoline,
then subsidies distort the market by steering investment away from economically attractive gasoline and toward economically unattractive ethanol.”
I congratulate you on this clever ruse to hide the real issue. It’s gasoline’s price
that is the distortion. So much in subsidies and incentives are given to the
oil/gasoline companies that the price of gasoline is artificially held down. If they
had to pay to defend their oil wells, pay to protect their lines of distribution, pay
for all of their own explorations, and to bailout makers of gasoline-powered vehicles whenever they run into trouble (thereby protecting their primary user of
their gasoline and oil), gasoline prices would be much higher.
Furthermore, if the government removed their unjustifiable limits on adding alcohol to gasoline, and mandated E15, or E20 or E50 for all fuel injected vehicles, producers of ethanol would be able to attract more private investment,
build more efficient plants, amortize expenses more economically, and take advantage of volume pricing as it might relate to the production and acquisition of
raw materials.
3. You wrote, “Economists broadly agree that, as a general rule, leaving
production and consumption decisions to market actors proves more
economically efficient than leaving the same to governmental planners.
Only if some unique and fundamental failure occurs that prevents gains
to trade in a given market is there room for the argument that government
intervention improves the functioning of those markets (Cowen, 1988, and
Cowen and Crampton, 2003).”
By “economists” I presume you mean that great body of people who have never
actually been involved in the entrepreneurial building of a business. Those
