A new study by Rice University raises an old point about ethanol – but backs it up with new research, so there is cause for hope that it just might be taken up by the Obama Administration. The report, which includes analysis by environmental scientists and was led by Amy Myers Jaffe, energy expert at Rice University, concludes that the US’ biofuels policies are flawed, raising questions about the economic, environmental and logistical basis for the billions of dollars in federal subsidies and protectionist tariffs that go to domestic ethanol producers every year.

Indeed the numbers detailed in the report are staggering:

In 2008, the US government spent $4bn in biofuels subsidies to replace roughly 2 per cent of the US gasoline supply. The average cost to the taxpayer of those `substituted’ barrels of gasoline was roughly $82 a barrel, or $1.95 per gallon on top of the retail gasoline price (i.e., what consumers pay at the pump.)