Full of beans.(biodiesel fuels' cost impact )

ITEM: "Suddenly," reported The Olympian (Olympia, Wash.) for May 23, "biodiesel is not only cost competitive, it has a slight edge over regular diesel fuel. This is welcome news on several fronts. Motorists benefit in the pocketbook by cutting down on fuel costs."

ITEM: President Bush praised biodiesel "as 'one of our nation's most promising alternative fuel sources,' as he stepped up pressure on the Senate to pass his energy bill, ... reported the Los Angeles Times for May 17.... In touring the [Virginia] plant, Bush sought to highlight an emerging fuel that is relatively clean-burning and has grown in production from 500,000 gallons a year in 1999 to 30 million gallons last year--an increase that makes biodiesel the fastest growing alternative fuel in the country...."

ITEM: "A few years ago," reported the Bremerton (Wash.) Sun for May 22, "the idea of running your car on a product made from soy beans or used cooking oil seemed like a wild scheme concocted by fringe environmentalists. Today, biodiesel is on the verge of going mainstream...."

CORRECTION: Both motorists and the economy as a whole would truly benefit if biodiesel could be produced at slightly less cost than regular diesel fuel, but that, unfortunately, is not the case. The above accounts dramatically downplayed or ignored the fact that biodiesel is "on the verge of going mainstream" only because it is priced artificially low because of government subsidies. Some do benefit when the market is rigged through subsidies, but the economy as a whole is hurt. Motorists may pay less at the pump, but they will be paying more through their taxes.

Biodiesel is following the path of ethanol, whose main ingredient is subsidized corn; biodiesel in this country is usually derived from soybeans, another subsidized staple. Such federal subsidies for biofuels have helped make agribusiness giant Archer Daniels Midland (ADM) very wealthy, totaling many billions of dollars over the years. One study a few years ago, for example, found that every dollar that ADM had made in profits cost American taxpayers 30 dollars.

Yet, according to Professor Tad Patzek, a chemical engineer at the University of California, Berkeley, "in terms of renewable fuels, ethanol is the worst solution. It has the highest energy cost with the least benefit." Ethanol uses more fossil energy in its production than the energy ...