The Dubious Economics of Ethanol
Article from: OGEL 5 (2004), in Economic and Commercial Context for Oil, Gas and Energy Law
Introduction
The United States has promoted ethanol as an alternative fuel through tax incentives, the Renewable Fuel Standard (RFS) and MTBE bans. Although these incentives have resulted in increased ethanol production and the construction of new plants, production of ethanol for use in fuel is not an economically viable industry and is environmentally dubious. S&P has concluded that ethanol projects are likely to receive deep speculative grade ratings ('B' category) because of ethanol's dependence on uncertain government programs. [1] It is not clear that such obscenely ...