[jluetjen]

Originally posted by dd74
John - you've left out one vital point to your analysis: China.

China, who expects to have employed by its people over 10 million cars in the next decade. Even if we do pull our needs from the Middle East, China will be there to supplant our absence, unless they too have a desire for ethanol. But that won't likely come from a country that is far more concerned with becoming industrialized than environmentally friendly.

True. But that's going to happen no matter what the US does. It will just be worse if the two countries have to butt up against each other for limited oil resources. The same applies to India. So the sooner that we ween ourselves off of a lot of oil, the better. Then we can let the Chinese and Indian economies suffer from being too addicted to middle-eastern oil. China's ecology is already suffering from the country using so much high-sulfer brown coal. I'll be able to describe it better from first hand experience after I visit China next month.

If ethanol is used on a larger scale, I think there could be some damage on three fronts: one is the price of fuel.

I don't follow this point. The price will depend on supply and demand. But let's move on...

The second is the toll this new fuel might have on machinery.

Not a problem if the machinery is designed to accept ethanol. It hasn't been a problem in Brazil to date that I can tell. It's just a relatively straight forward technical problem.

A third is the price of food, as corn is one of the main staples of the American diet.

Do you know how much corn is plowed under, or purchased by the government and either destroyed or given away as food support? A quick glance at the USDA Web Site (do a search of the .pdf for "corn") reveals that our government is paying corn farmers (family farmers or corporate farmers -- they're the same to me as far as this discussion is concerned) direct payments of $0.28/bushel (11.8%) on top of the current market price of $2.37. That is money that we pay in taxes directly to farmers. This is just one of the many supports that the government provides to corn farmers -- you can read the minutia of the rest of the document at your leasure to learn about the low interest rate loans and other goodies. Having the price of corn go up as a result of extra demand, and getting fuel at the same time sounds like a good deal to me! Let's see, the government budget goes down by eliminating the corn subsidies, our taxes go down and our farmers get richer (and buy more electronics which is my industry, not to mention the increase in tax payments that they'll contribute) while the despots in obscure parts of the world don't get my oil money. Sounds good to me!

So possibly our hands will be tied at the pump, at the mechanic, and at the dinner table.

Will the rise in corn production benefit farmers? I'm not certain it will benefit farmers as many farms are owned by corporate conglomeracies. I don't see how the traditional farm owner can gain a windfall if his property has already been purchased by a large company.

... which is owned by it's shareholders. So I guess that makes me a farmer if my investments include index funds that include corporate farming companies. I'll have to go check my prospectices.