Tuesday, September 11, 2007

It's only a trick if you find out...

Otherwise, it's magic. I have been frankly puzzled by producers who are bound and determined to find a pile of excrement overwhelming the pony of ethanol. Whether some weird "I'm not worthy" mind game is being played out I have no idea, but I do suspect this.

Still the idea that it's all a trick seems to have found traction. While it could be true, the real question is what our response should be to discovering this subterfuge. Here's mine.

The fools who rush in will make out like bandits. Seriously, my lifetime is replete with examples of conservatives being totally used by circumstance. The fear of failure, especially public failure, is an all too convenient excuse for inaction. And those who do plunge into the fire, if nothing else learn more about fire.

[Important Note: This analysis applies to producers, not small ethanol plant owners, who could be so very ummm, "discomfited" in the not-too-distant future]

But I digress. The "Trick" sector just received some "I-told-you-so" confirmation from the OECD.

C'mon, you know. The Organization for Economic Commission... no, no..

The Organization for Economic Cooperative Development...no, that's not it either. Cripes, here.

ANYHOO, as I was blithering, the ethanol miracle has of course been sponsored by your local political process, and as such it is fair game for political commentary.
The OECD will say in a report to be discussed by ministers on Tuesday that politicians are rigging the market in favour of an untried technology that will have only limited impact on climate change.

“The current push to expand the use of biofuels is creating unsustainable tensions that will disrupt markets without generating significant environmental benefits,” say the authors of the study, a copy of which has been obtained by the Financial Times.

The survey says biofuels would cut energy-related emissions by 3 per cent at most. This benefit would come at a huge cost, which would swiftly make them unpopular among taxpayers.

The study estimates the US alone spends $7bn (€5bn) a year helping make ethanol, with each tonne of carbon dioxide avoided costing more than $500. In the EU, it can be almost 10 times that.

It says biofuels could lead to some damage to the environment. “As long as environmental values are not adequately priced in the market, there will be powerful incentives to replace natural eco-systems such as forests, wetlands and pasture with dedicated bio-energy crops,” it says. [More]

Yeah, yeah, been there, heard that. But unless you have been comatose or under 30 for the last decade, you realize that actual, verifiable reality runs a distant second to powerful stories. I offer Iraq and the current belief among Republicans that WMD were found as evidence. Truth is a long-term winner, but a short term way to be mugged.

Hence my full-throttle approach to this ethanol boom, regardless of it's predicted length. While others prepare for Doomsday, I think a better strategy is to scale the highest point from which to (possibly) fall. If we have learned nothing else from recent political action, it is government feels responsible for my personal failings, especially since I am a farmer.

With others working diligently to weave a "safety net" I have not asked for, I plan to exploit (doesn't that sound like a nasty word) the passions of others for patronizing support.

Any rational person would have a hard time justifying ethanol subsidies, but here are not that many "rationalistas" around and they don't seem to have the votes. Adjusting is what democracy is all about.

[Thanks, Greg]

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