Congress doesn’t trust consumers to make the right decision when it comes to selecting the right source of energy. Congress knows better. That’s why legislation out of Capitol Hill is all about weaning us off oil and putting us directly on a “renewable energy” diet.
Witness the energy tax bill the House passed in February that slaps $18 billion in taxes on oil production to fund wind, solar, biofuels, and other “alternative” sources. Witness the new energy law passed in December mandating that Americans increase the use of ethanol and other biofuels at the pump to 36 billion gallons by 2022, up from 7 billion gallons required now. And witness the new farm bill that gives corn growers $10.5 billion in subsidies over the next five years, no matter how fast the price of corn rises—which, incidentally, has gone from $3.50 a bushel to a record $5.50 over the past three months.
The problem is that Congress, unlike consumers who make decisions based on price and availability rather than political pressures from entrenched farm interest groups, gets it egregiously – and damagingly – wrong. Even with oil topping $109 a barrel, it is still relatively abundant. As the U.S. Geological Survey reports, there are 3 trillion billion barrels of oil reserves still available globally. For perspective, since the first automobile rolled off the assembly line, we’ve consumed only one trillion barrels.
Conversely, ethanol and other biofuels are extremely limited resources requiring enormous amounts of water, energy, and land otherwise used for growing food. The new energy law’s requirement that Americans use 15 billion gallons of corn for fuel by 2015 – that doesn’t include the other 21 billion gallons to come from non-food sources like switchgrass and corn husks – will consume an astounding 30 million acres of cropland. That means unless the mandates are repealed, more than a third of our corn crops will be diverted from food to fuel in just seven years.
U.S. policies forcing biofuel usage already are creating food shortages in third world countries, elevating food prices to historic levels. The New York Times, a longtime supporter of biofuels, now reports, “The world’s food situation is bleak, and shortsighted policies in the United States and other wealthy countries – which are diverting crops to environmentally dubious biofuels – bear much of the blame.”