Food and fuel costs are going through the roof lately, but the U.S. Department of Agriculture (USDA) is pushing ahead with a plan to spend $200 million to finance the installation of gas pumps that can dispense fuel with higher ethanol content.
Critics are skeptical of the program, noting that the price of corn is already at record highs, thanks partly to the increasing use of ethanol, which is made from corn.
Farmers are happy about that, of course, but environmentalists aren't so sanguine. They say that ethanol is a less efficient fuel than gasoline and that using more ethanol doesn't necessarily save fuel.
Nevertheless, Agriculture Secretary Tom Vilsack is pressing ahead with his plan to offer grants and loans to service stations that want to install so-called "blender" pumps, which let motorists choose how much ethanol they want to mix in with their gas.
Most modern cars can burn up to 10% ethanol but "FlexFuel" vehicles can burn an 85% ethanol blend, known was E85.
While it's true that ethanol is cleaner-burning and thus produces less air pollution, it is also less efficient, meaning that a tank of E85 won't take you as far as a tank of 10% ethanol/90% gas. Add to that a higher per gallon price for E85 and critics say it will be hard to convince consumers to, in effect, pay more for less, DC Insider reported.
While popular with the farm lobby, corn and ethanol subsidies are likely to run into strong headwinds as Congress continues its push to reduce the deficit and eliminate unnecessary spending.
Already a bipartisan effort is underway to shift the focus to natural gas. A bill introduced last week seeks to jump start the use of natural gas fuel in cars by offering limited tax credits and regulatory changes to encourage the production and purchase of natural gas vehicles.
The legislation would offer tax credits to consumers who purchase new cars manufactured to run on natural gas. However, it's possible to retrofit existing vehicles to run on the fuel. Either way, the lawmakers say, it will help produce jobs.
"Natural gas is a cleaner, cheaper, more abundant alternative to foreign oil, and it is in both our economic and national security interest to use the vast reserves we have right here in our own backyard as the bridge fuel towards energy security," said Rep. John Sullivan (R-Okla.), vice chair of the House Energy and Power Subcommittee.
"Currently, 69 percent of the oil consumed in America is used for transportation, two-thirds of which we import from foreign nations - with gas prices approaching $4 to $5 per gallon, there is no time like the present to incorporate more natural gas vehicles into our transportation portfolio."
Plentiful and cheap
Natural gas is both plentiful and cheap, and estimates suggest there is enough in the U.S. to meet present energy consumption for nearly a century. The equivalent cost, compared to gasoline, is about $1.25 a gallon.
"It is important to know that the Natural Gas Act contains zero government mandates and zero subsidies," Sullivan said. "What we offer are incentives in the form of limited tax credits to give American businesses and families fueling options in light of 30 month high gas prices."
Rep. Dan Boren (D-Okla.) says natural gas could quickly remove American dependence on OPEC oil, stopping the flow of billions of dollars out of the country. The bill promotes both the economy, he says, and national security.
"It is supported by some of the most progressive, as well as by some of the most conservative, members of Congress," Boren said.