Sunday, May 25, 2008

Recent oil price increases have consumers and politicians in a tizzy ["Skyrocketing Oil Prices Stump Experts," Business, May 22]. One partial answer is a realistic look at our subsidy and tariff policies. The farm bill that Congress passed last week offers a subsidy of 45 cents a gallon for corn-based ethanol. Corn-based ethanol provides a marginal positive ratio of energy savings -- about 2.3 units of energy output to 2.0 units of energy input. Ethanol made from sugar cane has a 7 to 1 energy savings ratio.

Brazil depends on sugar cane ethanol for 40 percent of its transportation energy needs. It would like to sell some of its ethanol to the United States, but there is a U.S. tariff of 54 cents a gallon. With gas prices so high, do these policies make any sense? Another possible source of sugar cane-based ethanol is Cuba -- if we had a sensible trade policy with a country just 90 miles from our border.

PAUL O'CONNELL

Rockville