Ex-CIA Director James Woolsey is a proponent of ethanol because he believes it can help make the United States more energy independent. Never mind that the ethanol mandate that the Senate passed last summer would have decreased oil imports by only 7%, at a cost to the taxpayer of $74/barrel “saved.”
And for the purpose of this conversation, I will make only passing mention of fact that global demand for ethanol has the potential to destabilize developing countries. Suffice to say, there is a small pro againt many big cons with respect to the argument that ethanol is good for national security.
No, what I want to discuss is James Woolsey’s response to a question from Lawrence Kudlow, at a National Review-sponsored energy panel last Wednesday. Kudlow addressed Woolsey, and noted that the production of ethanol represents a tremendous new source of demand for corn, which has caused the price of that staple to increase.
Woolsey waived off Kudlow with assertions of increasing yields, and further claimed that the price of corn had fallen to normal levels (that is, before we started making fuel from food)—just above two dollars.
Yesterday, on the floor of the Chicago Board of Trade, corn hit $3.82. Woolsey was only 91% off, which, for a CIA man, is probably pretty good.
[N.B. My colleague Iain Murray today wrote a great piece on the national security dynamics of climate policy. It’s here]