Getting back to Ethanol, there have been plenty of people pointing out burning food is a bad idea for several years. Look at the posts over at Jerry Pournelle’s Chaos Manor for an example. The facts were there in plain sight for anyone who cared to examine them. http://www.jerrypournelle.com/
It is just that two years ago the chattering class was stuck in the middle of the Iowa Caucuses…(shouldn’t that be Iowa Caucui?), so all logic, reason, economic knowledge and forethought was tossed to the winds in a mad quest to create policies that the chatterers (sp?) thought would cater to the wishes of the Iowa caucus-goers. The twenty-something political wonks were all advocating mandates that would increase the demand for (and cost of) corn, as way of buying Iowa votes. Ethanol was perfect way to do this; it was “green”, it made the farmers (and ADM) happy, it helped replace the formerly mandated MTBE (see above), and it played into pipe dreams of “energy independence”. Of course if you actually examined the economics behind these proposals, and did some math, it all fell apart.
That however didn’t matter to the political wonks. Their “singular focus” (aka “tunnel vision”) was on getting their employer elected, the idea of their actions or policies having real world consequences does not appear to have been examined. The idea that the press might actually do their job and examine these proposals, (instead of simply doing a “cut and paste” from press kits put together by the above mentioned wonks)… well that would have required a level of understanding and effort that is apparently beyond the average reporter.
I remember going to a conference in September of last year where a Bio-diesel producer was whining that 80 bio-diesel plants had shut down in the US so far that year, and that his bio-diesel plant was no longer profitable after the price for soybean oil went from 24 cents to 40 cents on increased demand, (and the State stopped subsidizing him). Apparently ideas like using the futures market to hedge against a sudden increase in your feedstocks, making a product that could compete on an even playing field, (by his own admission his bio-diesel cost between 11 and 22 cents more a gallon to produce than real diesel), or simply not investing in a very risky business with thin margins were beyond him.
Biofules have always been a bad idea, and this was obviouis to anyone who did a serious investigation of the subject. The reason that this bad idea got so much attention and investment was that people decided to forgo serious research and make political and investment decisions based upon a “conventional wisdom”, rather than due diligence; even though the “conventional wisdom” was driven by obviously bad political policies, which were in in turn being driven by blatant political pandering. It’s Francisco d’Anconia’s San Sebastian Mines, all over again.
