Second thoughts on (corn-based) ethanol

Lost in the meaningless bickering among the presidential candidates over suspending the federal gasoline tax is some genuine news: Rising food prices are prompting second thoughts about corn-based ethanol — even from the candidate representing the home state of Archer Daniels Midland:

Democrat Barack Obama said Sunday the federal government might need
to rethink its support for corn ethanol because of rising food prices,
a stance similar to Republican John McCain's but at odds with farm
states considered important to the November election.

"What I've
said is my top priority is making sure people are able to get enough to
eat. If it turns out we need to make changes in our ethanol policy to
help people get something to eat, that has got to be the step we take,"
said Obama, D-Ill., on NBC's "Meet the Press"…

Sen. Hillary Rodham Clinton, D-N.Y., speaking on ABC's "This Week," agreed the issue needs closer review.

"What we need to do is accelerate the research into farm waste and into other cellulosic plant materials…"

Kevin Kerr of Resource Trader Alert figures the political tide will turn decisively against corn-based ethanol by next year, with the departed George W. Bush taking the rap for the food fallout.

Still, if the ethanol lobby is destined to lose its sway, the sugar lobby is another matter.

The ethanol giants of southeastern Brazil have
transformed how 185 million residents of this South American nation
power their cars and trucks. Now, they say they're ready to start the
same ethanol revolution in the rest of the world, if only the world
will let them.

That, however, is where Brazil's ethanol leaders are hitting problems.
They already churn out what many consider to be the world's cheapest
and most efficient mass-produced biofuel and say they can export
billions of gallons more.

the rest of the world doesn't seem to want what the Brazilians have. In
the United States, a 54 cent-per-gallon tax blocks most Brazilian
ethanol from reaching U.S. consumers.

And that's a function of U.S. sugar growers who also manage to keep much imported sugar from reaching U.S. shores — forcing Americans to pay at least twice as much for sugar as the rest of the world (and wrecking the ecology of the Everglades, to boot).

The Daily Reckoning