"Corn ethanol is a scam."
-Wal van Lierop, CEO of Chrysalix Energy Venture Capital
Financial Impact
Though corn ethanol is inexpensive compared to some alternative fuel sources, when compared to gasoline, corn ethanol is priced higher than gasoline.
The United States government provides $0.45/gal to petroleum refiners to blend corn ethanol, which is equal to a $5.4 billion subsidy. This instigates corn ethanol production, but it also makes it more expensive, effectively lowering gas prices. Another factor to corn pricing is the $0.54/gal tariff on imported Brazilian biofuel to protect American ethanol producers from foreign competition. Any ethanol from foreign countries instantly becomes more expensive.
The cost of producing corn ethanol is about $1.74/gal, only 4 cents less than the cost of production of gasoline. The average cost of corn ethanol fuel is $2.56/gal, only slightly less than gasoline at $2.89/gal.
The United States government provides $0.45/gal to petroleum refiners to blend corn ethanol, which is equal to a $5.4 billion subsidy. This instigates corn ethanol production, but it also makes it more expensive, effectively lowering gas prices. Another factor to corn pricing is the $0.54/gal tariff on imported Brazilian biofuel to protect American ethanol producers from foreign competition. Any ethanol from foreign countries instantly becomes more expensive.
The cost of producing corn ethanol is about $1.74/gal, only 4 cents less than the cost of production of gasoline. The average cost of corn ethanol fuel is $2.56/gal, only slightly less than gasoline at $2.89/gal.
"Ethanol is, in its pure form, just as much of a sham as oil."
-Rob Corddry
Political Problems
Politically, corn ethanol is a controversial topic in Congress. Many senators are campaigning for more government subsidies to fund corn ethanol production. They want to pay petroleum manufacturers to produce corn ethanol instead of using MTBE and petroleum.
Others lobby against corn ethanol, claiming that the negative energy balance is hurting the environment more than it is helping it. Corn ethanol, they say, emits more greenhouse gases than gasoline and biodiesel. It also doesn't decrease the United States' dependency on foreign powers because to produce the ethanol, fossil fuels are burned to create energy. Instead, they argue, it is increasing our dependency on ethanol exporters such as Brazil.
Others lobby against corn ethanol, claiming that the negative energy balance is hurting the environment more than it is helping it. Corn ethanol, they say, emits more greenhouse gases than gasoline and biodiesel. It also doesn't decrease the United States' dependency on foreign powers because to produce the ethanol, fossil fuels are burned to create energy. Instead, they argue, it is increasing our dependency on ethanol exporters such as Brazil.