To please the farm lobby and to help wean the nation off oil, Congress mandated that refiners blend a rising volume of ethanol and other biofuels into gasoline. They are supposed to use at least 15 billion gallons of biofuels by 2012, up from less than seven billion gallons in 2007.
But nobody at the time counted on fuel demand falling in the United States, which is what has happened during the recession. And that decline could well continue, as cars become more efficient under other recent government mandates.
At the maximum allowable blend, in which gasoline at the pump contains 10 percent ethanol, updated projections suggest that the country is unlikely to be able to use all the ethanol that Congress has ordered up. So something has to give.
“The market is full,” said Jeff Broin, chief executive of Poet, a company in Sioux Falls, S.D., that produces ethanol.
... A return of $4 gasoline might change things, by making E85 a relative bargain and spurring wider use. So would an unexpected spurt in total fuel demand. Otherwise, it is not at all clear how the nation’s coming surplus of ethanol can be absorbed.
STATISM INEVITABLY LEADS TO INEFFICIENT AND CORRUPT POLICIES AND BOONDOGGLES LIKE ETHANOL.
TO MASSAGE THIS BOONDOGGLE, OBAMA AND THE LEFT MAY VERY WELL SOON DO THINGS TO RAISE THE PRICE OF GASOLINE TO $4.
REMEMBER: OBAMA'S HOME STATE - ILLINOIS - IS A HUGE PRODUCER OF CORN AND ETHANOL.