The U.S. government’s biofuels policy needs a makeover, according to researchers from Rice University. In a new study published by the university’s Baker Institute for Public Policy, the team says that the economic, environmental and logistical basis for the billions of dollars in federal subsidies and protectionist tariffs that go to domestic ethanol producers every year is seriously flawed and urge lawmakers to fundamentally rethink the policy of promoting ethanol to diversify America’s energy sources. As an example of the unintended economic consequences of U.S. biofuels policy, the report notes that in 2008 ‘the U.S. government spent $4 billion in biofuels subsidies to replace roughly 2 percent of the U.S. gasoline supply. The average cost to the taxpayer of those ‘substituted’ barrels of gasoline was roughly $82 a barrel, or $1.95 per gallon on top of the retail gasoline price (i.e., what consumers pay at the pump).’ The report questions whether mandated volumes for biofuels can be met and whether biofuels are improving the environment or energy security. Based on analysis by environmental scientists, the paper highlights the environmental threats posed by current biofuels policy. ‘Increases in corn-based ethanol production in the Midwest could cause an increase in […]