Tired of Rising Food
and Energy Prices?
Blame Willie Nelson

By Tom Randall

Many people today think that the current drive to expand ethanol usage is a product of our on-going energy crisis. It's not. The ethanol issue was born in the farm crisis of the late 1970s and early 1980s.

The farm economy was in the dumper. Prices were low and falling. The more inefficient farmers were going broke and many were abandoning the land.

Country singer Willie Nelson was touring the country doing his feel-good "Farm Aid" concerts. The Democrat-controlled Congress called in actress Jessica Lange to testify about the plight of farmers because she once played a farmer's wife in a movie. In 1978, feeling the pressure, Congress passed the first 40-cent-per-gallon ethanol subsidy so the "corn liquor" could compete with gasoline, which was then retailing for 63 cents a gallon ($1.37 in year 2000 dollars, according to the Energy Information Administration). Production of ethanol, which was about 200 million gallons back then, is projected to be five billion gallons this year; and the price of gasoline has nearly tripled in inflation-adjusted dollars - yet, the subsidy has grown to 51-cents-a-gallon.

Comments:

1. Ethanol was never about energy security, which it can't provide. It was about the farm vote, particularly in the land of the Iowa Caucus.
2. The 51-cent subsidy makes no sense with gasoline prices as high as they are. This is especially true in light of the fact that ethanol produces more pollution than gasoline while getting about one-third less mileage.
3. Soaring corn prices, driven by ethanol production, have helped push food prices up by 3.9 percent in April alone, with even higher prices anticipated.
4. Even as this is being written, presidential wannabees are rotating through Iowa, wearing green hard hats while visiting plants like Hawkeye Renewables and extolling the importance of the problematic fuel.
5. Willie Nelson's song "Pilgrim" describes ethanol perfectly - "... a walking contradiction, partly truth and partly fiction, taking every wrong direction on [its] way back home."

Background and links:

You can find an extensive history of gasoline prices here, and read a concise history of ethanol in the Quad City Times here.

Tom Randall can be contacted at:
Winningreen LLC
3712 N. Broadway - PMB 279
Chicago, IL 60613
Phone: 773-857-5086

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