The January 30 issue of C&E News reports that DSM (Dutch State Mines) and Poet, a US-based corn to ethanol producer, are forming a joint venture to produce ethanol from corn residues (corn stover), which are not normally available for ethanol production.
On the surface, this looks very favorable. Primarily, because it involves private enterprise rather than government. The question remains as to whether the fuel market wants ethanol, but that should be a matter of significance only for the risk involved to these entrepreneurial companies.
On deeper investigation, we see that the joint venture is turning down an offer of loan guarantee from the US government. Hooray! Another victory for private enterprise and a demerit for socialism! But let us not be deceived, the whole operation is based upon a US taxpayer subsidy of $1 per gallon of ethanol produced. Quite a subsidy! Without it, the program would go nowhere.
We again need Congress to completely eliminate subsidies for any kind of energy production, whether ethanol, solar, wind, gas, or oil. The market should be allowed to judge the merits of these various energy forms, without government incentives to one or the other.
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