Among the many federal programs that deserve getting the ax in the name of deficit reduction and common sense, ethanol subsidies are at the top of the list.
Unfortunately the U.S. Senate doesn't see things the same way. Its version of the bill preserves the corn-based fuels many subsidies.
The idea of farmers expending energy to grow food for the purpose of producing a fuel additive has lost its appeal to many - even to those who fervently wish to reduce the United States' dependence on foreign oils. Technology that uses grasses to produce bio-fuel makes more sense to us than the use of a food staple such as corn.
As an editorial in the Washington Post recently pointed out the government "pays the industry for the privilege of selling to a captive market."
The federal government currently requires that ethanol be blended into the nation's gasoline, imposes tariffs on foreign ethanol and rewards those who blend ethanol into gasoline with a tax credit.
It's a redundant and wasteful practice that should be ended.
Comments (17)
Add commentCongress and reality
>>>>>Technology that uses grasses to produce bio-fuel makes more sense to us than the use of a food staple such as corn.<<<<<
Except that we don't know how to do this outside of research facilities. The Energy Independence and Security Act of 2007 mandated 250 million gallons of cellulosic ethanol for 2011. The EPA has just cut this to 6 million for 2011. Congress loves to pass silly laws. Why bother with the Laws of Physics and Nature?
It's only $6 billion for 2011
We do know how to make corn ethanol and will easily hit the 12.6 billion gallons mandated for 2011, more than the market needs. At 45 cents/gallon to the blenders, plus a few other goodies, the corn ethanol subsidy comes in around $6 billion. You hardly notice it in that budget busting 'compromise' bill.
Right
In five years you'll be back bemoaning the loss of native prairie grasses.
Ethanol may be near the top
Ethanol may be near the top of the list but the absolute top wasteful subsidy is the ones given to oil and gas. Those should have been stopped decades ago and certainly after the oil industry posted world record profits.
At $4+/gallon they dwarf the $.50/gal corn ethanol subsidy.
Fishhead's oil subsidies
Oil subsidies are mainly depreciation allowances which apply also for other business and reduce taxes. The oil and gas industry is still the largest tax PAYER in the US. Depreciation doesn't work well for ethanol, wind, etc because those businesses lose money and there are no profits to reduce. That's why ethanol needs cash per gallon and wind farms need cash up front. $600 million from taxpayers for the Cape Wind project. More millions for the current wind boondoggle in Stearns County which will keep all those homeowners awake with the noise.
Where did you dream up that $4 gallon number?
Thanks Rolf...
I knew you would jump in a correct the Fishster.
More for Fishhead
From the Energy Information Administration. Table ES5, Federal subsidies per equivalent unit of energy produced.
Solar $24.34
Wind $23.37
Biofuels $0.87
Oil and gas $0.25
Careful, Fish
A judge recently ruled that yodeling is offensive to Muslims.
water consumption
Another overlooked issue is water consumption which is large for biofuels.
Per million BTUs of energy produced, natural gas is the lowest at about 2 gallons. Conventional oil averages 10-12 gallons of fresh water consumed per million BTUs. Nuclear energy is about the same as oil. The heavy oils like the Alberta tar sands come in at 50-60 gallons. Then we have corn ethanol which varies depending on the degree of irrigation. In Kansas and Nebraska it's over 10,000 gallons of water per million BTUs. The champ is biodiesel from soybeans which can hit 20,000+ gallons in irrigation states.
The best way to get energy from corn is to eat it.
Rolf
Interesting stuff
Thanks, Rolf.
"Oil and gas $0.25" I thought
"Oil and gas $0.25"
I thought you just said that oil didn't get subsidies?
I've seen anywhere from $4/gallon to $10/gallon when you include all costs instead of externalizing them.
The military costs alone probably exceed $4/gallon and don't even begin to deny that there are direct military costs incurred in getting gas to the pump.
some numbers for Fish
$10/gallon would be $420/barrel. So in a year for the US with 6 billion barrels that's about $2.5 trillion in subsidies. Very funny. As to the fake military subsidy, the Chinese don't have a soldier in the Middle East, and they can buy all the oil they want as could we with no soldiers. And most of our imported oil comes from Canada, Mexico and Venezuela.
And if we invaded Iraq for oil, the joke is on us as we haven't gotten any. You are just pulling those numbers out of the air. Mine are from EIA/DOE reports.
Just because the Chinese
Just because the Chinese don't have to spend military dollars to secure their supply of oil doesn't mean that we don't have destroyers positioned in the gulf to keep our supply safe. If there weren't oil in the mideast we wouldn't be in 2 wars right now because we wouldn't have meddled in their governments.
There's also the environmental costs (subsidies) that don't show up at the pump.
LOL Fish!
If you think the Chinese don't spend a lot on their huge military, think again. Also, if you think the Chinese don't have destroyers in the gulf, you're wrong on that point also. They just don't have as many there as we do. They don't have to. We help secure their oil supply for them.
Oil Companies and Income Taxes
Rolf wrote:
> The oil and gas industry is still the largest tax PAYER in the US.
Well, now I'm curious. I realize that CONSUMERS of oil & gas pay taxes (state & federal) every time they fill up their tank, but when it comes to taxes paid by oil & gas COMPANIES the picture seems to be different.
For example, I've read a number of times that Exxon Mobil paid no federal income tax to the IRS in 2009 -- despite a net profit for the year of $45.2 billion. Apparently because they limit their US income tax liability by funneling their earnings through some 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands and elsewhere.
On the other hand, Exxon Mobil spent $27,430,000 on lobbying in 2009, so perhaps they regard that as a form of "taxes" :-)
Can you clarify?