Ethanol Bailout? Time To Shuck Corn

The bailout-seeking domestic auto industry has been criticized as being unproductive and inefficient. It hasn't been helped by mandated fuel economy standards that have done little to reduce our dependence on foreign energy or help the environment. Now the fuel we have been mandated to put in our cars, equally unproductive and inefficient, is also seeking a bailout. Ethanol never made much sense economically or environmentally. It never would have made it to market without congressional mandates and huge subsidies. Having the first presidential contest in the corm state of Iowa didn't hurt either. With oil prices plummeting, it is even less competitive — if it ever was. The product has benefited from a tax credit paid to gasoline producers to blend gasoline with ethanol; a federal fuel economy standard that sets a minimum amount of ethanol to be blended; and a 54-cents-a-gallon tariff on cheaper imported ethanol made in places like Brazil. Brazilian ethanol is made from sugar, not corn. But corn is grown in Iowa, and Brazilians can't vote. Recent legislation mandated increased ethanol use as well as a 51-cent-a-gallon tax credit and more corn subsidies. Over the last two decades the ethanol industry has been kept alive with more than $25 billion in federal handouts. Yet it still can't compete. Five of Iowa's 32 ethanol plants are in bankruptcy. They are operated by Sioux Falls, S.D.-based ethanol giant VeraSun Energy, which itself filed for Chapter 11 on Oct. 31. Eleven plants in other states have also fallen into bankruptcy....