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Commentary By Max Schulz

This One's for You, Iowa

Cities, Economics New York City

New York governor George Pataki spends Empire State money with an eye toward the 2008 primaries.

New York Governor George Pataki fired an opening salvo in his bid for the presidency recently in his twelfth and final State of the State address. Targeting his talk more to the voters of early-caucus state Iowa than to the New York taxpayers who pay his salary, Pataki laid out an energy plan long on promises about ethanol and renewable energy but short on market-based realities.

Pataki vowed to reduce New York's dependence on polluting foreign oil by giving a big push to clean ethanol. In his final budget submission Pataki pledged millions for the construction of ethanol and biomass refineries. He proposed freeing ethanol from the state gasoline tax, and offered companies that develop clean, renewable energy sources huge tax breaks. Pataki also promised millions to build renewable fueling stations across the state, including up and down the 641-mile New York Thruway.

Whether this plan will do anything to lessen domestic dependence on OPEC oil or to safeguard the environment is doubtful. What is certain, however, is that it will end up costing New Yorkers hundreds of millions of dollars.

And it will make a lot of midwestern farmers very happy, since New Yorkers will have to send their money out of state to buy the feedstock corn for Pataki's planned biorefineries.

Making ethanol in the United States requires corn, lots of it — a lot more than the politicians who champion ethanol acknowledge. Cornell biologist David Pimental, who has studied ethanol in depth, suggests that to truly make a significant dent in our nation's use of fossil fuels with ethanol would require devoting many additional millions of acres of crops to corn production.

Moreover, Pimental argues, the process of making ethanol uses about a third more energy (mostly from fossil fuels) than it gives off.

These claims point to the chief problem with ethanol: The economics don't work. The fact that Governor Pataki's tax scheme would offer to forego New York's take from a gallon of ethanol — and the Empire State's gas taxes are perhaps the highest in the nation — hints at the massive economic leap required to make ethanol competitive with regular gasoline. Yet despite the massive government subsidies given to ethanol production and use over the last several decades, it still hasn't gained much of a market foothold.

The same economic problems plague the other renewable technologies Pataki favors. Over the past several decades, governments have poured billions in research dollars into developing wind and solar energy. The result is that after these massive public investments in solar and wind, they currently generate less than one third of one percent of total U.S. electricity.

Albany Democrats were quick to jump all over Pataki's plan. They denounced it as a large sop to midwestern agribusinesses (Big Corn?). And they say it will substantially raise the price of corn, hurting dairy farmers in northeastern New York.

Ethanol has other problems as well. For one thing, it doesn't hold up as well as regular gasoline in extremely cold weather. Ever been to Buffalo in January?

It gets worse. An official of the American Lung Association of New York told the New York Times: "Ethanol increases ozone formation, which is obviously harmful for people with lung disease."

If Pataki wanted to strike a blow for lessening our energy dependence on the Middle East, he could have called for increased oil and gas exploration in the Arctic National Wildlife Refuge or offshore California and Florida. Keeping it closer to home, he could have lobbied last year against the energy-bill provision that banned drilling in the Great Lakes.

If Pataki really wanted to strike a blow for clean energy, he could have made a big push for nuclear energy, which currently produces 20 percent of the nation's electricity. Nuclear power emits none of the harmful emissions associated with fossil fuels, and supplies of uranium, the principal fuel that powers a nuclear plant, are abundant in North America.

Moreover, Pataki could have given his support to construction of a liquefied natural-gas terminal in Long Island Sound. America's electricity demand is expected to increase by close to 50 percent in the next several decades. Solar power and wind technologies are simply unequipped to provide the truly massive amounts of electricity the future will require.

Those are the sorts of proposals that would demonstrate seriousness about the energy challenges facing the United States in the coming decades. But they won't win you the Iowa caucuses.

This piece originally appeared in National Review Online

This piece originally appeared in National Review Online