Ethanol: Bad Deal for Tax Payers?

Driving to Chicago this week I filled my tank in Illinois with gas that was about 10% ethanol. The gas was a lot more than I paid in Missouri for gas without it. So I thought that I'd Google a bit and see what was going on. Here are a few bullet points from an article on ethanol subsidies
  • Corn ethanol subsidies totaled $7.0 billion in 2006 for 4.9 billion gallons of ethanol. Here is the breakdown of those subsidies:
    1. 51¢ per gallon federal blenders credit for $2.5 billion from our tax dollars.
    2. $0.9 billion in corn subsidies for ethanol corn from our tax dollars.
    3. $3.6 billion extra paid at the pump.
  • Even with high gas prices in 2006, producing a gallon of ethanol cost 38¢ more than making gasoline with the same energy.
I once worked as a contract employee at the US Department of Agriculture and was pretty appalled at the subsidies that the Cotton Industry received from tax payers. Programs like these are testimonials to the power of lobbyists in Washington, DC. I am in favor of new types of energy but you really have wonder about something that needs this much subsidy.

Am I missing something? Anyone have experience with ethanol prices in your state?


  1. Hi Bob,

    Ethanol is pretty much a bust, although it is huge in Illinois due to all the corn grown there. Not only was the price you paid extremely expensive, Ethanol doesn't contain the same amount of energy pure gasoline has, so your gas mileage will decrease as well. Ethanol is generally not the best value for taxpayers or consumers.

    BTW, it looks like you got bitten by the huge new Illinois tax increases. Illinois is essentially bankrupt and the governor is wringing out revenue wherever he can find it.

    Prayers for you and Ann!

  2. I don't think we have this? We have LPG and diesel. But we definitely need something different. Petrol is now $10 per gallon... horrendous!

  3. To me it seems immoral to make fuel from food. If you can make ethanol from sawgrass grown on otherwise non-productive land, fine. Otherwise find enough ways to save fuel that in the long run we can cut our need for these kinds of fuel altogether.

  4. Ethanol is a bad idea... it is corrosive and does not mix well with gasoline. If it sits for any length of time, like say a week, it separates and settles to the bottom of the tank. It also will clog fuel lines, and anything it sits inside.

    It is killing marine engines and small engines in things like lawn mowers. To preserve this type of engine, extra additives must be bought to offset the problems and avoid expensive repairs.

    Not to mention that to travel the same distance, we need more of this hybrid fuel.

    How are we saving money and the environment?


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