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Ethanol Conspiracy Theories Ignore Fuel’s Legitimate Shortcomings

October 26, 2007 by

IER Press Release

“Cellulosic ethanol is akin to the tooth fairy; it’s an entity that many believe in, but no one ever actually sees.”–“The Senate’s Ethanol Delusion,” by Robert Bryce, Energy Tribune

Washington, DC—Yesterday, Renewable Fuels Association President Bob Dineen issued a statement urging Congress to pump billions of subsidies into ethanol. Dineen’s rhetoric begs lawmakers to create an artificial market for ethanol, build the extra infrastructure needed for transport, and condemns anyone who speaks about its shortcomings as part of a “coordinated offensive of mistruths”. These statements undermine the effort to have a serious debate about the right way to diversify our energy sources and increase America’s energy security. The ethanol industry has been getting super-sized subsidies for more than two decades. Throughout that time, cellulosic ethanol has always been “right around the corner.” We should be looking to innovators and entrepreneurs to develop the next great technological breakthroughs in energy—not to lobbyists seeking more handouts in Washington.

Despite Dineen’s accusation of an “insidious campaign” by the fossil fuels industry against biofuels, there are a myriad of legitimate concerns about ethanol. Those concerns include, but are not limited to, ethanol’s effect on food prices, its huge water demands, and its overall financial cost. (For more on this see the recent Wall Street Journal editorial, “Ethanol’s Water Shortage”)

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00Publius Contributor - Democrats/Leftists - Energy - IER - Science - Security/Safety - Society/Culture - Technology - Uncategorized

Closed-door Energy Taxes Will Harm US Competitiveness

October 18, 2007 by

IER Press Release

Pelosi rushes backdoor bill, neglects pro-growth solutions in favor of failed policies

WASHINGTON- Today, The Institute for Energy Research (IER) cautioned that Congress’ proposed $15 billion tax hike on the U.S. oil industry will raise consumer prices and put domestic companies at a competitive disadvantage. At the same time, House Speaker Nancy Pelosi is avoiding public scrutiny by refusing to review the bill in a bipartisan conference committee, rather than allowing open debate of the details of this misguided energy policy. This closed-door approach to reconciling the energy bill only underscores its shortcomings: less energy and higher prices.

Yesterday, a panel of experts from energy policy and economics organizations discussed the harmful effects of this proposed legislation. Robert Murphy, economist for the Institute for Energy Research (IER); Ben Lieberman, senior policy analyst with the Heritage Foundation; and Margo Thorning, senior vice president and chief economist with the American Council for Capital Formation explained possible unintended consequences for consumers and businesses of higher taxes on the oil and gas industry. For example, the Windfall Profits Tax of the 1980s resulted in lower domestic oil production, higher oil imports, and a depressed U.S. oil industry with reduced profits that limited the development of technologies for obtaining oil in deeper off shore and on shore wells.

“This proposed tax hike would generate only $15 billion, whereas opening exploration in the Alaskan National Wildlife Reserve [ANWR] would generate $75 billion in revenue,” Lieberman explained. This type of pro-growth strategy, he added, would preserve American goals of increased supply and energy security, whereas taxes undermine them. Lieberman characterized the current proposal as “raising taxes on energies that work in order to subsidize energy sources that don’t work,” referring to the economic inefficiency of biofuel and wind energy.
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