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Sasha Stashwick’s Blog

Still time for Congress to do better on corn ethanol subsidies and save billions

Sasha Stashwick

Posted December 10, 2010

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We’re getting down to the wire as Congress nears final votes on a package of tax incentives for renewable energy. The latest plan out of the Senate would extend the Volumetric Ethanol Excise Tax Credit, the main corn ethanol tax credit commonly known as the “VEETC”, for just one year. That’s a far cry from the 5-year, $31 billion dollars worth of subsidies the corn ethanol industry spent the year pushing for, as we discussed here and here, and a big win for Americans worth $25 billion in taxpayer savings. But that’s still $6 billion next year that Congress should not waste on this redundant subsidy and mature, polluting technology.

With everyone from FreedomWorks to MoveOn, Senator Feinstein to Senator Kyl, and every major national newspaper’s editorial board supporting an end, once and for all, to corn ethanol subsidies, there’s still time for Congress to do better. Ending the tax credit now would save an additional $6 billion and reducing it by 20% would save $1.25 billion. That’s money that can be put towards supporting real clean energy technologies like wind, solar, and energy efficiency, and the Advanced Energy Manufacturing tax credit (section 48C of the tax code). These are the investments we need to help retool America’s factories to make clean energy technologies possible, grow our economy, and protect our environment.

Saying no to 5 more years of corn ethanol subsidies is a start and will make it easier for new, better-performing biofuels that provide long-term energy security and clean up our air and water to gain traction. But Congress should go further. It’s time to end the VEETC or at least reduce it.


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BenDec 10 2010 01:45 PM

What does NRDC think about the Renewable Fuel Standard?

Tom KoehlerDec 10 2010 02:03 PM

Corn ethanol displaces the dirtiest fuel of all -- gasoline. It is the only alternative that has made a dent in our petroleum imports. According to both EPA and California Air resource Board it reduces CO2 emissions by as much as 30 percent compared to gasoline. And you call it polluting? I think the Junk Food and Meat money you have been hired with is polluting your thinking. We need ALL alternatives. Why are you demonizing a true renewable alternative that is successful today. Could you please grow up and act with the dignity and respect that lobbying on behalf of alternative energy for the public good requires? Or are you too tainted with Junk Food money to have integrity?

John LiffeeDec 10 2010 02:45 PM

Hey, Tom Koehler — where exactly do you get the idea that NRDC is funded in any way by "Junk Food and Meat" money? Source? That does not at all sound like the organization I know.

You, however, most definitely have a vested interest in the VEETC — why haven't you seen fit to mention that you actually work for a corn-ethanol producer???

Get a load of this guy, folks — takes some real chutzpah to do what he's doing!

Tom KoehlerDec 10 2010 03:07 PM

Hey John, I am a proud co-founder of Pacific Ethanol in California. The California Air Resources Board has certified our corn ethanol to be the LOWEST CARBON fuel produced in the nation . Much better than gasoline. Our CEO has been a member of the Green Party his whole adult life. We are environmentalists on the front lines of business. These facts about us and what we do is why i am so upset with NRDC as they ignore the facts and demagogue the issue. And I know they are receiving support from the very well financed and coordinated campaign by the Junk Food and Meat Industries. Let them open their books. I did not fall off a turnip truck yesterday.

Cindy ToyDec 11 2010 03:39 PM

In trying to understand more about this issue, I googled NRDC’s look on ethanol. I did read the one report your organization published. It was a factual, cited and scientific report:

Excepting..."Pimentel and Patzek as an outlier, the energy return on investment values
produced in the five other studies indicate that corn ethanol has a solid renewable energy return on its
fossil energy investment – its use does indeed help reduce our fossil fuel consumption….Still, the examination contained in this paper does indicate that ethanol production can reduce carbon dioxide emissions and that different production methods can produce greater or lesser greenhouse gas emissions. Fortunately, two of the corn ethanol studies in particular (Graboski and Shapouri et al.) took the additional step of estimating the reductionin crude oil consumption achieved by driving the same distance using ethanol versus gasoline. These studies show that very little petroleum is used in the production process of ethanol and thus a shift from gasoline to ethanol will reduce our oil dependence regardless of its impacts on our use of other
fossil fuels."

Beyond your own positive look at ethanol and its benefits in reducing CO2, improving air quality, and reducing our dependence on dangerous Middle East oil, let’s talk about what your defense council is supposed to be looking after: the environment. We just had one more major oil tragedy in the gulf of Mexico. I understand that if there had been an ethanol spill, there would have been people still enjoying the beach, a virtually unchanged healthy sea life and no environmental disaster. An Ethanol spill would easily dissipate. We do not have to drill in environmentally sensitive areas to find ethanol. We do not have to lay pipe lines in Alaska or create islands off the coast of Alaska as BP is doing right now to get around regulations to lay pipe under water for more fossil fuel.

As your article is about subsidies, what kind of subsidy is it going to take to clean up after a spill like the one in the gulf this year? The towns and coastal boarders around the Exxon Valdez spill are still recovering years later, and we don’t even hear about the “smaller accidents”. The American people have to pay for that. If you could even put a price on fossil fuels, what would it cost if we had to pay for wars and spills. What kind of subsidies are we talking about? Our nation is feeling the effects of supporting fossil fuel now as we close our own schools, libraries and are unable take care of our poor and older citizens. What about the wars in Afghanistan, and Iraq to protect our oil interest, creating destabilization in the Middle East and need for protection.

Isn’t it true that the reason corn prices are rising is from the food industry, adding corn into more and more products? What is the amount of corn in foods versus the amount used in ethanol? Aren’t we sending more corn out of the country to feed other countries increasing meat production? Even if ethanol use is on the rise and our use of corn in foods is increasing, thank God we are providing a good wage for our American farmers instead of sending dollars out of the country to buy fuel in the Middle East and buy corn elsewhere.

I did not see a solution in your article. Your own published report states that ethanol reduces CO2 and reduces our dependence on fossil fuels. When you choose to not support ethanol, it follows that you support fossil fuel consumption. The less ethanol we use, the more fossil fuels we use. The more fossil fuels we use, the more soldiers die and are wounded and in rehabilitation hospitals when they get home for years. We have more environmental clean-up costs. We have more toxic substances in our sensitive environmental areas. In the end, more than just hidden subsidies spent, but lives, a healthy environment, homes and jobs lost.

The solution seems to be ethanol. The fallow land that has been put out of production, due to farmers selling off their lands and businesses, could be put back in production as well as jobs created in building ethanol plants and in ethanol production. Better agricultural techniques could be employed to even further the benefits of ethanol, providing more jobs, and we can get this country and environment back on its feet.

Your article does nothing, in fact it hurts the environment, as what you are supporting is less ethanol use, meaning more fossil fuel use, more drilling, more oil spills and more war. In effect you are advocating to attack the environment even harder. And that is the honest truth. Ethanol is not the enemy but one of the solutions. You should be writing articles that would support our American made fuel, instead you are advocating for a non-renewable, toxic and hazardous to the planet, fossil fuel. There is no better alternative at this point than home grown, renewable ethanol. It would be a good and just action to rescind your article and write a better and more truthful position that reflects the research on ethanol done by your own organization.

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