Two years ago, Congress ordered the nation’s gasoline refiners to do something that is turning out to be mathematically impossible.
To please the farm lobby and to help wean the nation off oil, Congress mandated that refiners blend a rising volume of ethanol and other biofuels into gasoline. They are supposed to use at least 15 billion gallons of biofuels by 2012, up from less than seven billion gallons in 2007.
(Read more from nytimes.com)
Text book case of the failures of central planning.
Response from my teacher, Austrian Economist, Patrick Barron.
Dear Sirs:
There are several fallacious concepts that drove the ethanol mandates. Number one is that it is in the best interest of the U.S. to become more energy independent. There is no reason, either economic or otherwise, that requires that the U.S. government deny its citizens access to the cheapest form of energy available anywhere in the world, which includes, of course, many unexploited regions within our own borders. Furthermore, it is unconscionable that the government so blatantly penalize the vast majority of its citizens for the undeserved benefit of the farm lobby by using its power of compulsion and coercion to force us to use an inferior (ethanol delivers only three-fourths of the energy value of gasoline) and harmful fuel (as explained by Mr. Wald in his informative article). Scrap the ethanol mandates, allow drilling and refining anywhere in the U.S., and you will find that the so-called energy problem goes away.