Ethanol Subsidies – Twenty Years Ago and Now

In 1994, I spoke against the subsidy for ethanol manufacturers (mainly) Archer Daniels Midland and Staley.

Those with long memories might recall that when I ran against Robert McClory for Congress in 1980. I was enthralled with the possibility that ethanol might be part of the answer to America’s energy woes.

At the time Ford was selling ethanol-fueled cars in Brazil.  Brazil was using sugar cane to produce the fuel.

Two men in Elgin, Dale Pate and Herb Hansen, developed a corroborator that allowed cars to run on a mixture of 85% ethanol and 15% water.  (You can read a more extensive article I wrote in 2010 here.)

That seemed important because the hardest part of distillation is squeezing out the last part of the water.

I was running for the U.S. Senate at the time against Adlai Stevenson III.  The fitted a Buick with the device and off I was campaigning across the state.  (One trip was to Lawrenceville, where my former colleague State Rep. Roscoe Cunningham set up a meeting.)

The Buick had some problems, so we tried a Ford Pinto.

And I shifted to a campaign for Congress when Bill Scott decided to run against Stevenson.

It worked quite well, except for one night when I was heading back from a Lake County appearance and it stalled on Route 120 just east of where it goes south to Woodstock.  Gravers came to the rescue.

Other than that, there were no mechanical problems.

That’s not to say there were not problems finding ethanol.

Living in Woodstock at the time (360 S. Madison Street), I usually filled up at FS.

So, to say I was pro-ethanol is something of an understatement.

By 1994, however, I reasoned that if the fuel had not been able to make in the market without government subsidies, it was time to pull the plug.

The state subsidy bill passed, of course.

The Chicago Tribune's January 6, 2014, editorial in favor of ending subsidies to ethanol producers.

The Chicago Tribune’s January 6, 2014, editorial in favor of ending subsidies to ethanol producers.

Monday, the Chicago Tribune editorialized in favor of ending subsidies to alcohol distilleries.

Forty percent of the corn crop goes toward the production of ethanol. the editorial says, pointing out that in addition to direct government subsidies, higher prices for livestock and other food products mean there is another subsidy.

Twenty years after my change of mind.


Ethanol Subsidies – Twenty Years Ago and Now — 1 Comment

  1. Correction: 40% of ethanol goes in the door of ethanol biorefineries, and half of that (the protein and other nutrients) come back out as high-quality animal feed (DDGs). To imply that 40% of corn is converted to ethanol when only the starch is pulled out, is misleading.

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