02/27/06 An ethanol contrarian

An ethanol contrarian. This is the Northwest Farm and Ranch Report. I'm Bob Hoff. Today's report next. Farm and Ranch February 27, 2006 Everybody seems to be on the biofuels bandwagon these days. But not Dennis Avery of the Hudson Institute, a Washington D.C. think tank that bills itself as non-partisan. Avery doesn't think ethanol is the way to go. He sees it as a trap between ethanol made from cheap Brazilian sugar cane and the lowering cost of oil from Canadian tar sands. Avery says the U.S. won't be able to produce enough corn for both future feed needs and ethanol and environmentalists aren't about to let forests be ripped out to expand production. Avery: "You don't have the land and you have too much feed demand. Right now you are looking at it as a bonus but the only reason it is a bonus is that the government is paying you more for the ethanol than it is worth. Your giving Brazil the profitable end of the corn market, the feed, and putting your corn into the unprofitable end, the ethanol. You are even paying to build the ethanol plants. And it is all an illusion of oil scarcity that doesn't exist." Avery thinks the best way to reduce U.S. dependence on Mideast oil is in the Canadian tar sands. Avery: "They tell me they have got the cost down below $25 a barrel. That's the other jaw of the ethanol trap. If there are two trillion barrels of oil in the Athabasca Tar Sands at less that $25 a barrel then that doesn't leave a lot of good market for ethanol." I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.