Is Ethanol a Boon or Drain On Our Economy?
Northwestern Financial Review › August 27, 2009
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Summary
In 2005 and 2007, two pieces of energy-related legislation with potentially far-reaching consequences became law. A key feature of these bills was a federal mandate to substantially increase the production of ethanol over the next two decades. These bills were aimed at reducing U.S. dependence on foreign-produced petroleum and at addressing global climate change. One way to partly meet the federal mandate would be to remove the federal import tax. This would allow imports of ethanol from Brazil, which is the world's second-largest ethanol producer. According to a recent report by the Congressional Research Service, Brazilian ethanol enjoys a significant cost advantage relative to U.S.-produced ethanol. Moreover, since Brazilian ethanol is made from sugar cane, allowing increased imports from Brazil would lessen the potential supply pressures on U.S. feed grain production noted above.
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Is Ethanol a Boon or Drain On Our Economy?
In 2005 and 2007, two pieces of energy-related legislation with potentially far-reaching consequences became law. A key feature of these bills was a federal mandate to substantially increase the production of ethanol over the next two decades. These bills were aimed at reducing U.S. dependence on foreign-produced petroleum and at addressing...
See the full content of this document
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