From a free-market perspective, the only redeeming social value in the Bush Administration’s biofuels initiative is the proposal to lift the 54-cents-a-gallon tariff and 2.5 percent ad valorem duty on imported ethanol.
Think about it for a moment. If the goal is to lower gasoline prices and increase the diversity of fuels available to American consumers, then ending the virtual ban on Brazilian ethanol — which comes from sugarcane and is less expensive than the Iowa-corn-fed variety — is a no-brainer. Ditto if the goal is to damp the flow of petrodollars to Middle East governments suspected of funding terrorists.
But Republican Sen. Chuck Grassley of Iowa takes strong exception to the Administration’s proposal. Given Washington’s addiction to pork and the prominence of the Iowa Caucuses in the upcoming presidential cycle, I’m putting my money on Grassley.