Congress Ends Ethanol Subsidy

[jimmy olsen]

Finally some good news from Washington!


http://www.detroitnews.com/article/20111224/AUTO01/112240320/1148/rss25

December 24, 2011 at 1:00 am
Congress ends corn ethanol subsidy
Trade group expects industry to 'survive'

    By David Shepardson
    Detroit News Washington Bureau

Washington —The United States has ended a 30-year tax subsidy for corn-based ethanol that cost taxpayers $6 billion annually, and ended a tariff on imported Brazilian ethanol.

Congress adjourned for the year on Friday, failing to extend the tax break that's drawn a wide variety of critics on Capitol Hill, including Sens. Tom Coburn, R-Okla., and Dianne Feinstein, D-Calif. Critics also have included environmentalists, frozen food producers, ranchers and others.

The policies have helped shift millions of tons of corn from feedlots, dinner tables and other products into gas tanks.

Environmental group Friends of the Earth praised the move.

"The end of this giant subsidy for dirty corn ethanol is a win for taxpayers, the environment and people struggling to put food on their tables," biofuels policy campaigner Michal Rosenoer said Friday.

The subsidy has provided the oil and agribusiness industries with 45 cents per gallon of ethanol blended into gasoline. By some estimates, Congress has awarded $45 billion in subsidies to the ethanol industry since 1980.

Tom Buis, CEO of Growth Energy, an ethanol trade group, said earlier this month the industry would survive without the credit.

"The blenders' tax credit initially helped the ethanol industry develop. But today, we don't have a production problem, we have a market access problem," Buis said.

"Without the tax credit, the ethanol industry will survive; it will continue to reduce our dependence on foreign oil, create jobs and strengthen our economy."

Ethanol supporters are worried Congress might roll back a 2007 mandate that dramatically boosts the use of ethanol annually through 2022. The mandate jumps from 15 billion gallons of renewable fuels — including cellulosic ethanol in 2015 — to 36 billion gallons by 2022.

The corn lobby has lost clout this year, losing votes in Congress. The Senate voted 73-27 in June to end the ethanol tax subsidy and tariff.

But Michigan Democrats Carl Levin and Debbie Stabenow were among the 27 senators who voted against ending the subsidy.

Michigan is the nation's 11th-largest corn producer, harvesting 315 million bushels in 2010. The state has more than 11,000 corn growers, and they planted corn on 2.45 million acres last year, or about 4 percent of all land in the state.

Earlier in December, a bipartisan group of more than 70 House members urged a congressional block on higher levels of ethanol blended into gasoline.

Automakers and other engine makers have clashed with corn growers since 2010 over whether the United States should allow the use of a new blend of ethanol called E15 because it is 15 percent biofuel. The Environmental Protection Agency has approved the use in all vehicles from 2001 and after.

In August, the EPA approved fuel labels designed to warn drivers of older vehicles not to use the fuel, but it still must be registered before the fuel can go on sale. In February, the House voted 285-136 to block the EPA from moving ahead with E15 regulations.

"E15 is not ready for prime time," said the letter signed by Reps. Gary Peters, D-Bloomfield Township; Mike Rogers, R-Brighton; John Conyers, D-Detroit; Tim Walberg, R-Tipton; Bill Huizenga, R-Zeeland; Darrell Issa, R-Calif.; and Loretta Sanchez, D-Calif., among others.

Automakers and other groups have opposed approval of E15, warning it could damage engines in some models. Automakers "unanimously expressed concerns that E15 is likely to harm engines, void warranties and reduce fuel efficiency," said the congressional letter.

[Ed Anger]

Fuck you.

[Neil]

Makes sense.  The ethanol subsidy was a colossal waste.  Still, don't the Democrats need a couple of Midwestern states to win?

[DGuller]

Wow, that's huge.  I never thought something that is such an unqualified good idea could ever get through.

[Habbaku]

Wow, that's huge.  I never thought something that is such an unqualified good idea could ever get through.

Seriously.  Is the article from The Onion?

[DGuller]

Of course, this is only part of the fix.  There is still a requirement to contaminate fuel with ethanol, so even without a subsidy, you still have a minimum level of demand mandated by the government.  Still, this is a good start, and hopefully just a start.

[Ideologue]

Good.  It's about damned time.

[Scipio]

Wow.  Do we have to rename it Progress now?

[Legbiter]

Wow.  Do we have to rename it Progress now?

[garbon]

Hmm...when I was last in DC there were signs all over the place warning me about Congress choosing not to support ethanol.

[Admiral Yi]

Of course, this is only part of the fix.  There is still a requirement to contaminate fuel with ethanol, so even without a subsidy, you still have a minimum level of demand mandated by the government.  Still, this is a good start, and hopefully just a start.

What are you talking about?

[Sheilbh]

Wow, that's huge.  I never thought something that is such an unqualified good idea could ever get through.

Seriously.  Is the article from The Onion?

To be fair nothing got through.  It's wholly appropriate that this happened because Congress failed to agree on passing something

[DGuller]

Of course, this is only part of the fix.  There is still a requirement to contaminate fuel with ethanol, so even without a subsidy, you still have a minimum level of demand mandated by the government.  Still, this is a good start, and hopefully just a start.

What are you talking about?

There is a mandate to mix in a certain amount of ethanol into gasoline, in order to decrease oil consumption.  Paradoxically, sometimes this drops your fuel mileage so much that you're actually using more gasoline to go the same number of miles.

[KRonn]

Washington —The United States has ended a 30-year tax subsidy for corn-based ethanol that cost taxpayers $6 billion annually, and ended a tariff on imported Brazilian ethanol.

Congress adjourned for the year on Friday, failing to extend the tax break that's drawn a wide variety of critics on Capitol Hill, including Sens. Tom Coburn, R-Okla., and Dianne Feinstein, D-Calif. Critics also have included environmentalists, frozen food producers, ranchers and others.

The policies have helped shift millions of tons of corn from feedlots, dinner tables and other products into gas tanks. 

At last! Finally got rid of this insipid tax give away for a damned bad idea! And I'm glad that we'll now allow Brazilian ethonol, which is made out of sugar cane which is a much more efficient crop. Still don't like the idea of ethanol though, if as others say it can actually drop gas mileage, and for some engines it can corrode rubber bushings and gas lines.

[mongers]

Always seemed rather daft, growing a food crop and then turning it into portable fuel, would the energy in the finished fuel even cover the energy costs of growing and processing it into ethanol ?

Much better, if it's not needed for food, to turn the land over to some fast growing 'tree' crop like willow or that brazilian grass and burn that directly in local power stations (probably new ones) for electricity.