With gas prices unbearably high and driving season approaching, Americans are easy prey for those who promise to ease their pains at the pump. This makes it high season for politicians and their cronies seeking taxpayer-financed support of alternative fuels. While President Obama favors electric cars, preferably run on solar and wind energy, other interest groups are eagerly pursuing handouts for vehicles fueled by natural gas.
Americans should be wary of any special interest group claiming that a helping of taxpayer money will pave the way to a better energy future, regardless of what source is on the table that day.
Today, oil dominates in the US transportation sector. Ninety-four percent of all transportation is fueled by oil, whereas natural gas and renewable sources are responsible for only three percent each. Fifty-one percent of all oil consumed in the United States is imported from nations such as Canada, Mexico, Saudi Arabia, Venezuela, and others, leading many to worry about US foreign oil dependence.
A long list of Presidents, going all the way back to President Nixon, has promised to liberate the American people from foreign oil dependence. President Obama follows in their footsteps. Leaving aside the question of whether oil self-sufficiency is as desirable a goal as politicians make it out to be, thus far none of them succeeded in meeting that goal. Nonetheless, the pursuit of oil independence, in conjunction with promises of lower carbon emissions and lower costs, have justified taxpayer-financed support for favored industries, which have consistently failed to live up to their hype.
The ethanol trifecta is the prime example of energy policy gone wrong. Three decades of federal subsidies, trade protection, and, most recently, mandated ethanol blending, have still failed to produce a measurable impact on our foreign oil dependence. Worse yet, America’s ethanol policy costs taxpayers about 6 billion in direct subsidies every year, while also imposing indirect costs from converting gas stations and car engines to handle the ethanol, by damaging engines and fuel lines, and because ethanol-blended gasoline allows us to drive fewer miles than pure gasoline, forcing Americans to burn more fuel than necessary to go the same distance as before. Far from reducing our CO2 emissions, ethanol production has been found to actually increase emissions.