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Posts Tagged ‘ethanol subsidies’


Thursday, December 9th, 2010

Nuclear Townhall
December 9, 2010


With ethanol subsidies hanging in the balance, the Renewable Fuels Association put out a boastful release yesterday claiming that continuing tax breaks were “part of the deal” in President Obama’s decision to extend the Bush tax cuts.

Senator Kent Conrad, Democratic Chairman of the Senate Budget Committee, was not so sure. Conrad told reporters ethanol was “in a separate section of things to be resolved” and that the subsidy rate had not been determined, according to Reuters. RFA agreed in that respect. "The final details — the length of the extension and the value of the credit — are still being discussed," it stated.

“A 36-cent ethanol tax credit for 2011 was proposed last week by the chairman of the Senate’s tax committee, along with an 8-cent small producer credit, continuation of the 54-cent import tariff and revival of a $1 a gallon biodiesel credit,” according to Reuters. “Ethanol groups have said they will accept lower subsidy rates and other reforms as part of a longer-term policy on biofuels.”

Those long-term plans include a proposal to convert the credit into a fund to install blender pumps that would deliver fuel up to 85 percent ethanol plus loan guarantees for biofuel pipelines. The government would also be asked to encourage production of cars and trucks that can burn the higher-ethanol fuel.

The whole ethanol house of cards has come under fire in the last week from an unprecedented alliance of Tea Party Republicans and mainstream environmental organizations that have become disenchanted with ethanol’s environmental impact – even though the whole idea of “biofuels” originated in the environmental movement. The ethanol manufacturers, who have become a powerful lobbying group, are poised to resist this effort. By making tax advantages part of the tax deal, they could head off the wider effort in Congress to eliminate the subsidies.

Read more at Reuters


Wednesday, November 24th, 2010

November 24, 2010
Nuclear Townhall
From the Editors

Al Gore’s admission that ethanol subsidies are bad for just about everything may reverberate into the coming Congressional debate over whether to extend the tax advantages and/or expand the mandate to 15 percent in gasoline.

Earlier this week, Gore confessed to an environmental conference in Greece that ethanol had been a bad idea all along. "It is not a good policy to have these massive subsidies for first generation ethanol," Gore told the gathering. "First generation ethanol I think was a mistake. The energy conversion ratios are at best very small.” 

Moreover, he admitted that his real motivation in plugging ethanol was to curry favor with farmers.  “One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president."

The matter may not end there. On yesterday’s American Spectator website, Andrew Cline, editorial page editor of the New Hampshire Union Leader, chronicles the long history about how, as Vice President, Gore cast tie-breaking votes several time to keep ethanol subsidies alive.

It’s not a pretty picture.

Scientific opinion had turned against ethanol well back in the 1990s but the lobbying pressure from farmers only became so intense. Gore played a big part in succumbing to this pressure. It was only after rising world corn prices set off riots around the globe in 2007 that the case against ethanol began to gain political punch. Even former oil man and President George W. Bush succumbed to the ethanol mystique, promising to double U.S. capacity by 2012.

The Obama Administration proposed the 15 percent standard and is locked into ethanol subsidies. With 189 ethanol distilleries already operating in the Midwest and 16 more under construction, it will take a powerful coterie of politicians to stand up to the ethanol lobby. But the incoming Tea Party Congress may just be that group.

Read more about it at the American Spectator


Tuesday, November 23rd, 2010


November 23, 2010
Nuclear Townhall
From the Editors

General Jubilation T. Cornpone was the Civil War hero of Li’l Abner’s Dogpatch of whom it was sung:  “With our ammunition gone and facing utter defeat / Who was it who burned the crops so we had nothing to eat.”

It’s been suggested on Nuclear Townhall that the Department of Energy ought to erect a statue of Gen. Cornpone outside its offices in honor of its support of corn ethanol. The 30-year-old government policy has not only wasted energy but placed significant upward pressure on food prices.

Now Al Gore has made a play to be remembered along with Gen. Cornpone when it comes to ethanol subsidies.  Speaking at an international energy conference in Athens this week, the Nobel-Prize-winning finally admitted ethanol wasn’t such a great idea."It is not a good policy to have these massive subsidies for first generation ethanol," said Gore at the green energy conference sponsored by Marfin Popular Bank. "First generation ethanol I think was a mistake. The energy conversion ratios are at best very small. [But i]t’s hard once such a program is put in place to deal with the lobbies that keep it going."

Gore was speaking, of course, of the entire American Midwest, which has now built nearly a quarter of its economy around ethanol subsidies. Dozens of ethanol distilleries have been built at the cost of hundreds of millions of dollars and 40 percent of the corn crop now goes into our gas tanks.

Moreover, Gore was also willing to admit that he originally supported ethanol subsidies to kowtow to farmers and that the government-initiated push into biofuels has pushed up world fuel prices. "The size, the percentage of corn particularly, which is now being (used for) first generation ethanol definitely has an impact on food prices,” he said. “The competition . . is real."

The former Vice President may be modeling for that statue real soon.

Read more about it at Reuters