More Eggs in the Basket Than Ethanol: Diversify!

T. Boone Pickens may be delaying his big wind farm, but the grid issues hindering his efforts tell me we should push more, not less, to diversify our energy portfolio.

A quick example of our previous bad planning: the federal government has given inordinate support to corn ethanol at the expense of other alternative energy sources that could bust our addiction to foreign oil (foreign oil: that includes TransCanada's tar sands oil). As the Environmental Working Group reports, in 2007, ethanol received 76% of all federal renewable energy tax credits ($3 billion out of $4B) and two-thirds of all federal renewable energy subsidies. Kick in the $2B in crop subsidies for corn, and you have a lot of federal eggs in one basket.

The Obama Administration still wants more ethanol subsidies, but it may take a more balanced approach to alternative energy. We can continue to debate the merits of ethanol as an energy source. But even if ethanol is a good energy solution, we should still make a greater effort to diversify our options for energy and for rural development. When wind and even carbon offer new revenue routes for South Dakota farmers, it makes no sense to pour the bulk of our cash into corn.