Tuesday, January 3, 2012

The Government Steps Away

To my amazement Congress has allow the 30-year subsidy for corn based ethanol to expire.  You can read about it here.  Even more amazing are the observations of Dan Taylor, former president of the Iowa Corn Growers Association.  " (loss of the tax credit) will reduce the profit margin for a lot of people in the ethanol business.  But it won't be fatal as long as the demand for ethanol and gasoline remains strong."

There is no demand for ethanol.  There is a federal mandate that it be blended with gasoline in order to reduce demand for fossil fuels.  If the federal mandate was eliminated, there would be no market for blended gasoline, and therefore no market for corn based ethanol.  Corn crops would be 100% available for food.  Might be a good thing for the world.

No comments:

Post a Comment