About Jack Markowitz

Jack Markowitz 412-380-8551
Business Columnist
Pittsburgh Tribune-Review
Retired business editor Jack Markowitz writes Sundays and Thursdays.

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Where you come down on ethanol is a kind of business personality test.

It's a hot-button issue like “climate change” or “income inequality.” “Bailout” and “welfare” are good for an argument.

Average folks can't possibly dig up all the facts, and we react from the gut.

If you're a liberal, you probably like ethanol. It's supposed to help the environment and the national balance of payments.

A conservative tends to feel conned.

Ethanol is the corn-based product (though it could come from other vegetable matter) that gets blended 10 percent into the gasoline most of us use. But 15 percent is apparently coming, And up to 85 percent suits some elegant tanks. With all its virtues, the additive adds costs, and taxpayers and consumers ultimately pay.

Ethanol emits 20 percent less carbon dioxide into the atmosphere than unleaded gasoline. The replacement obviously works out to less oil from overseas. On the other hand, we could drill more here, too.

What conservatives detest is, first, the government dictate. Free market forces alone would never spur all that high-cost corn refining and blending. And now, after decades of taxpayer subsidy, ethanol consumes 40 percent of the U.S. corn harvest. Terrific, except for unintended consequences.

No. 1, higher food prices. A study by Texas A&M University put the hits on consumers and animal feed users (dairy farmers, for example) at $40 billion a year. And maybe that's lowballing. The golden kernel is a raw material in countless processed foods and industrial products.

Everybody would love ethanol if it came from nuisance “biomass,” tree waste and weeds. But making such “cellulosic” feedstock commercial is a laboratory dream not yet pulled off.

Ethanol's critics see self-serving fluff even in the fuel's environmental claims.

Yes, a gallon of blend spews less carbon than straight gasoline. But it also gets lower mileage. And other costs might flip the equation altogether. Corn-growing takes lots of water, and irrigation uses energy. Fertilizers are oil-based. Harvesting and transportation machinery spews diesel fumes. Ethanol also ships by truck and rail car. It's not easy on pipelines.

Gut-critics go further. They blame President Obama for not suspending the blend mandate during last year's drought. Skimpy rainfall hurt the corn harvest, boosted food prices and may even have added to global starvation. And who knows what a prod was given to the bread riots and regime changes of the Arab Spring?

Yet it's not a one-sided story.

Ethanol supports an estimated 400,000 U.S. jobs and multi-billions in sales and profits. By no surprise a Washington-based American Coalition for Ethanol lobbies for 1,500 members and 200 refineries, each supporting an average regional 700 jobs. ACE claims the ethanol blend is keeping 485 million barrels a year of imported oil out of the U.S. market.

And if you think there's no possible good side to higher corn prices (except to the biggest Corn Belt land owners), ACE has an answer. Pre-ethanol, corn prices were “chronically low,” it says. It identifies ethanol's main opponents as Big Oil and Big Food. Big name-calling is such a help to making up your mind, isn't it?

Jack Markowitz is a Thursday columnist for Trib Total Media. Email jmarkowitz@tribweb.com.

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