22 Feb, 2007

President Bush’s Ethanol Gamble

Posted by: Rob Bluey In: Business

President Bush traveled to North Carolina today to promote his plan for cellulosic ethanol, which is produced from wood chips, grasses or other materials instead of corn. Bush has made this a significant component of his “Twenty in Ten” goal to reduce America’s addiction to oil.

Immediately after proposing the idea in his State of the Union address, Bush faced criticism from conservatives for putting stock in a plan that will jack up the price of gas for consumers and ignores the free-market approach to addressing the nation’s energy challenges. The Heritage Foundation’s Ben Lieberman called it “the next such Washington boondoggle,” comparing it to the Carter-era Synfuels program.

Nevertheless, Bush made his pitch today at Novozymes North America, Inc., where he proudly proclaimed, “The role of the government is to stimulate thought and investment and set goals.” Bush lauded the “progress” that’s been made thus far on the initiative.

Conservatives remain unconvinced — as they should. Commodity-market analyst Dave Juday wrote today on National Review Online that Bush is “willing to throw the commodity economy into virtual chaos over biofuels vs. petroleum.” Juday’s piece is an excellent economic analysis of what’s at stake.

Cellulosic ethanol will likely get few people excited, but as principled conservatives who care about the free market and oppose government mandates, we need to make sure the White House hears from us.

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