Today Scott Hennen had Russ Newman on his show. Russ is the VP of Development for the Tharaldson Ethanol Plant in North Dakota.  Russ, obviously, spent his time flaking for his product and talking about how “optimistic” he and the rest of the ethanol industry are about ethanol’s future in the energy market.

The problem?  The reason he’s optimistic is because the federal government has mandated increases in ethanol production.  Which begs the question: If ethanol is such a wonderful product that’s worth getting behind, why does it have to be mandated?

I actually emailed in a question to Scott for Russ and Scott asked it on the air: Why should North Dakotans continue to subsidize ethanol when it has never once been competitive with gasoline in the energy markets.

Russ’ response?  Dead silence, followed by an answer that boils down to: Subsidies are good because they make ethanol blended fuel cheaper at the pump.

Of course, ethanol fuel blends are only cheaper because taxpayers - who are also the same people who buy the fuel - paid for it to be cheaper.  So they’re “saving” at the pump because they already paid a portion of the fuels price in taxes.

So where are the savings?

Russ also talked about the economic impact of his ethanol plant.  Again, the problem is that by taking heavy subsidies from the state and federal government any economic development the plant creates is offset by the additional tax burden it places on taxpayers.

In truth, Mr. Newman’s interview only cemented for me the absurdity of the ethanol industry as it is currently structured.