Biofuels and Free Trade

Eye-opening opinion piece in the WSJ today (on-line subscribers only, unfortunately) about free trade and biofuels. While its interesting that the farm lobby is pushing ethanol hard, they really don’t just want any old ethanol. Countries such as Brazil are producing ethanol from sugar cane at very cost-effective rates ($20/barrel of oil equivalent, according to the article). However, import tariffs combined with massive subsidies for domestic corn-based ethanol kill these as viable energy sources in the US. Instead we have GM running ads about corn-based ethanol, even though many believe it takes more than a gallon of gas to create the equivalent amount of ethanol.

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