Congress Must Repeal the Ethanol Mandate

A man lived in the suburbs with his wife and children. They had a rather standard suburban house fitted with electricity, running water, and gas heat. It even had a couple of fireplaces.

Winter was approaching and there was a chill in the air. His wife started to complain that she was cold, but the man would not turn on the gas heat.

As he had done for the last few years, each evening when he came home from work he would drive farther out into the country in his gasoline automobile and cut wood on a wooded lot, which is father had given him. He would then bring the word home and stock it for use in the house fireplaces. However, his wife did not find fireplace heating very satisfactory and she still complained, especially since she had no hot water for her bath.

The friend mentioned that there was a new process for recovery of natural gas, which significantly increased the supply.

The man was an accountant by profession, and since he still was using electricity, he went to his computer and googled the Internet. He learned about fracking and also found out that there was a 200-year supply of natural gas available. Since he was also a student of actuarials, he determined that it would be several generations before general population use would have any effect on natural gas availability. He also concluded that what he did personally with respect to saving natural gas by using firewood, would have no significant effect on the supply.

He turned on the gas valve at home and stopped his wife's griping.

Another man also lived in the United States. This man raised cattle for beef in the general food market.

Some years earlier, the Congress, in its infinite wisdom, had decided that the natural sources of petroleum in the US were limited and should be conserved. Congress also said that since the country was running somewhat short of money, we should cut down on our oil imports from foreign sources. To accomplish this objective, Congress passed a law forcing all gasoline manufacturers to add ethyl alcohol to gasoline for public use. This presumably would stretch out the supply of natural gasoline from petroleum.

The ethyl alcohol was the same material that is normally considered drinking alcohol. It is produced by fermentation of sugars contained in plant materials, such as grapes and corn. To force the program, Congress granted several billion dollars to various ethyl alcohol producers from corn kernels and many more billions of dollars to produce ethyl alcohol from corn cobs and husks. The first technology went very well, in that the ethyl alcohol producers from corn kernels put out a tremendous amount of ethyl alcohol. Unfortunately, the second technology was not developed well enough, so that there was no alcohol produced from corn husks and corn cobs. The second inability also forced a considerably increased amount of ethanol made from corn kernels.

Along came a drought. Production of corn kernels dropped almost 20%

As the drought continued, with a scarcity of corn for cattle feed, the cattleman started to send more of his younger cattle to market. This temporarily made more tender beef available to the consumer at low prices. Later, the cattleman started to send breed cattle to slaughter. Since they were generally somewhat older, this put tough beef on the consumer market, and since it was a limited amount, prices increased. After a year or two, the cattleman was out of business and the remaining cattlemen were having a hard time staying in business.

Meanwhile, the new fracking process also brought a considerable increase of crude oil for gasoline to the theoretical market. Theoretical, because environmental groups, in consort with the Environmental Protection Agency were making it difficult for petroleum producers to actually make more petroleum available for use as gasoline.

As Congress sat and did nothing, the corn shortage was bad for the nation's food supply and the ethyl alcohol produced from it and added to gasoline became an unnecessary expense.