Ethanol Subsidy Is Only a Temporary Steppingstone

Wall Street Journal - Letter to the Editor
May 24, 2008; Page A10

Regarding "Khosla's Conspiracy," Review & Outlook, May 20): I have never advocated subsidies for food-based ethanol. In fact, I have advocated the simple rule that no technology should get subsidies beyond seven years (unlike oil).

You failed to acknowledge the recent U.S. Department of Agriculture report that corn ethanol is responsible for less than 3% of the food price rise, validating my position that most inflation is caused by other factors, including energy costs. Merrill Lynch has estimated that oil costs would be 15% higher if biofuels were withdrawn from the market. Biofuels production has cut oil consumption by one million barrels daily -- effective savings of $120 million per day at today's prices. The Journal should note this impact before demanding repentance.

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