U.S. corn ethanol "was not a good policy": Gore

ATHENS Mon Nov 22, 2010 10:34am EST

Former Vice President Al Gore speaks during the World Business Forum in New York October 6, 2010. REUTERS/Shannon Stapleton

Former Vice President Al Gore speaks during the World Business Forum in New York October 6, 2010.

Credit: Reuters/Shannon Stapleton

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ATHENS (Reuters) - Former vice-president Al Gore said support for corn-based ethanol in the United States was "not a good policy", weeks before tax credits are up for renewal.

U.S. blending tax breaks for ethanol make it profitable for refiners to use the fuel even when it is more expensive than gasoline. The credits are up for renewal on December 31.

Total U.S. ethanol subsidies reached $7.7 billion last year according to the International Energy Industry, which said biofuels worldwide received more subsidies than any other form of renewable energy.

"It is not a good policy to have these massive subsidies for (U.S.) first generation ethanol," said Gore, speaking at a green energy business conference in Athens sponsored by Marfin Popular Bank.

"First generation ethanol I think was a mistake. The energy conversion ratios are at best very small.

"It's hard once such a program is put in place to deal with the lobbies that keep it going."

He explained his own support for the original program on his presidential ambitions.

"One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president."

U.S. ethanol is made by extracting sugar from corn, an energy-intensive process. The U.S. ethanol industry will consume about 41 percent of the U.S. corn crop this year, or 15 percent of the global corn crop, according to Goldman Sachs analysts.

A food-versus-fuel debate erupted in 2008, in the wake of record food prices, where the biofuel industry was criticized for helping stoke food prices.

Gore said a range of factors had contributed to that food price crisis, including drought in Australia, but said there was no doubt biofuels have an effect.

"The size, the percentage of corn particularly, which is now being (used for) first generation ethanol definitely has an impact on food prices.

"The competition with food prices is real."

Gore supported so-called second generation technologies which do not compete with food, for example cellulosic technologies which use chemicals or enzymes to extract sugar from fibre for example in wood, waste or grass.

"I do think second and third generation that don't compete with food prices will play an increasing role, certainly with aviation fuels."

Gore added did that he did not expect a U.S. clean energy or climate bill for "at least two years" following the mid-term elections which saw Republicans increase their support.

(Reporting by Gerard Wynn; editing by Keiron Henderson)

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Comments (9)
wesley69 wrote:
So, Mr. Gore, decisions have consequences.

Nov 22, 2010 11:16am EST  --  Report as abuse
actnow wrote:
Even though I live in Illinois, I can tell you (as an engineer) that ethanol supports by the tax payer is about buying mid-western votes for tax payer dollars. Farmers make out, politicians make out, tax payers are burned. It takes about as much diesel fuel energy to produce a unit of ethanol energy (farming and processing). So, we’re paying a premium for a carbon neutral form of energy that doesn’t decrease our need for exported oil. This was a scam from day one, brought to you by your local mid-western politicians and farmers….thanks Washington; once again!

Nov 22, 2010 11:40am EST  --  Report as abuse
jstaf wrote:
It is nice to see this Farmer’s Welfare program exposed for the joke that it is, if the politicians are looking to get rid of waste this is a good place to start.

Nov 22, 2010 12:29pm EST  --  Report as abuse
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