Saturday, December 04, 2004

Catching up -- Morris criticizes ethanol column

Posted by Craig Westover | 7:34 AM |  

“Ethanol production makes sense when you consider the facts,” is the headline on David Morris’ November 28 column criticizing my column “Let’s have both sides of the ethanol debate.”

To summarize Morris’ column, which spends a lot of inches describing how ethanol is made, his main points are that while ethanol may have been an inefficient source of fuel (circa 1980) it gets more efficient every year and today “the ratio of energy out to energy in is about 1.5 to 1.” (I’m going to assume that’s BTU’s, as Morris offers no units of measure to quantify that statistic, but does provide this site for those looking for more information.) He also notes that corn production is becoming more efficient, less fuel consumptive, and less environmentally unfriendly. He criticizes my column for not providing hard information.

Nonetheless, the one salient fact that Morris omits from his column is answer to the question if “ethanol production makes sense,” why did it, does it and will it continue for the foreseeable future to require government subsidies? Government subsidies is a strange strategy for an organization with the name Institute for Local Self-Reliance,” of which Morris is vice-president.

That’s the bottom line and the essence of my column -- Is the best way to achieve Senator Coleman’s goals “to maximize environmental protection, energy independence, and economic development dividends” through government subsidies rather than the drive of marketplace forces? Morris believes in the former, as long as ethanol is the winner. He makes this statement in the ILSR report entitled “A Better Way to Get From Here to There: A Commentary on the Hydrogen Economy and a Proposal for an Alternative Strategy.”

The strategy currently envisioned to effect a hydrogen economy may be diverting significant intellectual, financial and political resources from more attractive strategies. Before we take that leap, we should take a long hard look at the premises and promises of the hydrogen economy and at the other alternatives available that could achieve the same goals more quickly and cheaply.
Morris’ “alternative strategy” is, surprise, renewable fuels. I don’t really have a problem with that. For all I know, Morris might be right. What I do have a problem with is his contention that a [government] focus on a hydrogen economy “may be diverting intellectual, financial and political resources from more attractive strategies.” He also uses the royal “we,” that generally signals government intervention and more subsidies.

A hydrogen economy or renewable fuel development should be decided by the market, not politicians. Every ethanol subsidy makes hydrogen, and other forms of “clean” energy that may not even on the drawing board yet, less finally attractive to investors and hence, less likely to be developed. Every ethanol subsidy robs society of potential for something better in the long term and less prosperity in the short term (society pays more for less).

Simple fact -- ethanol production makes sense, not when Morris and Coleman says it does, but when private investors and the market says it does. That’s the salient issue.