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October 18, 2007

It came from the Midwest

Posted by Angel Gonzalez at 10:59 AM

What unspeakable threat can make left-leaning non-profits such as Oakland-based Food First agree with The Wall Street Journal's unabashedly pro-capitalist editorial section? What hallucinogenic compound is making environmentalists jump in the same boat as Big Oil lobbyists? The menace turns out to be home-grown: corn-based ethanol.

Many liberal environmentalists have long stood against corn-based ethanol because they tag it as inefficient (it takes a high amount of energy to produce ethanol from corn), polluting and responsible for a distortion in food prices. They see the subsidized adoption of ethanol as mainly a boon to agri-business. As Congress meets to discuss an upcoming energy bill, groups such as Food First are ramping up their opposition to a proposal to raise federal mandates on blending ethanol into gasoline to five times the current consumption level.

But the shots also come from the other side of the political spectrum. The new mandate proposal was met on Wednesday with a scathing editorial from The Wall Street Journal, saying that such a move would create a water crisis.

Heavily subsidized and absurdly inefficient, corn-based ethanol has already driven up food prices. But the Senate's plan to increase production to 36 billion gallons by 2022, from less than seven billion today, will place even greater pressure on farm-belt aquifers.

The Journal's piece says that "force-feeding" corn-based ethanol into the U.S. energy mix is not the right answer.

International institutions are also weighing in on the debate. An International Monetary Fund report said that Brazil's sugar-cane ethanol is "the only form of ethanol that is generally cheaper to produce than gasoline," a WSJ story says.

Big Ethanol's push has also created a rift in the business world. Big Oil - which could see its refining margins shrink if ethanol replaces a significant amount of gasoline - would rather see compete against gasoline in a free market.

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Tricia Duryee
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Angel Gonzalez
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