Q: How many conservative economists does it take to change a light bulb?
A: None. The darkness will cause the light bulb to change all by itself.

H.R.Spalding Co., Boston, 1852, was one of thousands of stores selling various liquid fuels, including an ethanol blend, before kerosene was introduced with a tax advantage in the 1860s.

History is loaded with myths, and they are often used to lead is in one direction when a more accurate historical account might provide a rather different lesson.

Take, for instance, the Whale Oil Myth — the idea that the free market, without any government intervention, is fully capable of making energy technology transitions. People who believed in the myth have argued against environmental regulation, technology policy and even federally-funded energy research.  They say we need to “let the market decide.” It’s a fair debate, and there are many good points to be made on both sides.

But what about the history lesson implicit in the whale oil myth?  Doesn’t that tell us that conservative economists are right? And the question is, and must always be in these situations, whether we have an accurate history in the first place.

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By Bill Kovarik
Roanoke Times, Sept. 4, 2011.

The ethanol industry has attracted many critics over the years. Much of the criticism is well meant and should be well taken. The yardsticks that are usually applied to the industry – carbon footprint, biodiversity, competition between food and fuel, government subsidies, air and water quality – are certainly appropriate, even if they are rarely applied equally to all energy industries.

But the critics tend to miss the most important point about the historical reason for the development of the ethanol industry.  The primary reason for blending ethanol in gasoline is NOT to replace Middle Eastern oil. (That was always a secondary issue.)

The reason that today’s corn ethanol industry has become so large is that the oil industry does not have a safe additive to bring gasoline up to 87 octane.

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There’s a new fractured history lesson on ethanol hitting the blogs.

“Stop the Ethanol Scam,” Roanoke Times March 20, 2011 is one.  “Ethanol a Massive Waste” is  another one. Both fail to take basic historical facts into account.

These commentaries say that the Nazis commandeered “the entire European potato crop in 1944 and turn(ed) it into ethanol to fuel V2 rockets.”  So people starved in order to feed the German rocket program. The historical lesson, they say, is that we are “driving down much the same road with the current ethanol program in America.”

But is the premise remotely realistic? Could the entire European potato crop have been turned into V2 rocket fuel?

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From NPR: The recent tax cut bill preserves a pretty sweet deal for corn ethanol. It extends a tax subsidy, along with an import tariff supporting a fuel that already enjoys a guaranteed market. But what do taxpayers get for all the help?  In the first of our three-part series on ethanol, Frank Morris of Harvest Public Media reports that the heated debate over ethanol tramples some basic realities.

Ethanol may seem modern, but people throughout Appalachia have been making it for hundreds of years.

“We are known for our moonshine industry,” says science writer Bill Kovarik with a laugh, “very well known for our moonshine industry. It is still flourishing.”

Kovarik, who’s also a professor at Radford University, says that ethanol is, first and foremost, a way to make corn more valuable. More than a century ago, Henry Ford built cars to run on it, with just that in mind.   “So, you could replace the transportation income that farmers used to have by [their] growing the fuel for the cars, instead of growing horses and feed.”

Link to the rest of the story  /  Link to the longer Harvest Media version

Postscript: Bob Dineen of the Renewable Fuels Association had an interesting take on this series:

“Where in this series is the comparison to Big Oil?  You can’t talk, weigh, or dismiss an alternative without talking about the problem it is trying to solve.  So where, perhaps in the final piece, will we hear NPR discuss the billions in subsidies and tax breaks that go to Big Oil conglomerates and dangerous dictators in oil rich countries?”