Two new bills seek to end corn ethanol subsidies; one would continue giveaways to bad biofuels
Posted March 11, 2011 in Moving Beyond Oil, Solving Global Warming, U.S. Law and Policy
Two bills were introduced this week in the U.S. Senate that would stop support for bad biofuels and save taxpayers billions this year alone. Both efforts, one led by Senator Feinstein and the other by Senators Coburn and Cardin, would repeal the main corn ethanol tax credit—know as the Volumetric Ethanol Excise Tax Credit or “VEETC”—showing once again the bipartisan Congressional support for ending wasteful corn ethanol subsidies.
They contrast sharply with Senator Klobuchar’s move to recycle her harmful energy bill from last summer, which would move us backwards by continuing massive giveaways to bad biofuels like old dirty corn ethanol at the expense of the cleaner, advanced biofuels we need and strip away critical safeguards that protect our valuable forests from being turned into fuel.
Starting in June of this year, the Feinstein bill would repeal the $0.45 per gallon tax credit we pay to oil companies blending corn ethanol and lower the import tariff we impose on imported ethanol from $0.54 to $0.45. Ethanol that qualifies as an “advanced biofuel” under the Renewable Fuel Standard—that is, ethanol that delivers at least a 50% reduction in greenhouse gas emissions from a 2005 baseline—would still qualify for the tax credit. A day earlier, Senators Coburn and Cardin joined forces across the aisle to introduce a similar bill that would more simply eliminate the VEETC effective immediately.
Explaining how her bill would cut government waste and boost our environmental and energy security goals, Senator Feinstein said:
"Ethanol subsidies and tariffs sap our budget, they're bad for the environment and they increase our dependence on foreign oil. My bill would save taxpayers $3 billion just in the first six months, money that would help bridge the divide in today's budget dispute."
Senators from both sides of the aisle have shown that they understand that smart, fiscally responsible energy policy means ending subsidies for bad biofuels and supporting the development of better biofuels that reduce our dependence on foreign oil, enhance our national security, create jobs, and curb global warming pollution. This starts with ending subsidies for old, dirty corn ethanol. Congress should resist attempts to lock us into more dirty fuels and seize the opportunity to save taxpayers billions while putting us on the path towards better biofuels.
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Comments
James Singmaster, Ph.D. — Mar 12 2011 10:43 AM
Many times I have pointed to biowastes as being an already harvested biofuel supply that can be pyrolyzed for many benefits. Much of those wastes, especially if composted, are being allowed to biodegrade to reemit carbon dioxide that nature has so kindly trapped for us. The mishandling of biowastes is the major cause of pollution problems from germs, toxics and drugs. Pyrolysis of the biowastes would destroy all the germs, drugs and most of the toxics(Some get expelled in the volatile mix of gases generated, but could be trapped out). With those hazards being destroyed huge amounts of money being spent to monitor dumps would no longer have to be spent. And there would be no costly problems with several hazards now showing up in food or drinking water supplies or bulk releases of the hazards in flooding out of dumps . Pyrolysis of biowastes would reduce unneeded CO2 reemitting, generate some clean fuel and greatly reduce our expanding problems of contaminated foods and water, such as Salmonella in eggs, E. coli in spinach, and several drugs now having EPA limits in drinking water. Putting limits is a waste of time on EPA's part indicating that it does not recognize getting control of the source of most pollutants, our biowastes. For more, you can google my name to find many comments about biowastes on blogs including Switchboard. Dr. J Singmaster
Ron S — Mar 13 2011 02:48 PM
I don't understand the logic for keeping a high import tariff on ethanol. Would this only be levied on imported ethanol derived from cellulosic sources? If so, why would we want to do that? The tax credit for cellulosic ethanol, once the VEETC is removed, is a PRODUCTION tax credit, not a blenders' credit. So the logic that the tariff is a "claw back" of the blenders' credit doesn't apply, as imports would not qualify for the credit.
If the import tariff would apply to ALL molders fuel ethanol, then U.S. Corn ethanol producers would still enjoy a huge advantage over foreign suppliers, and consumers would accordingly pay more for the ethanol they are obliged to use. Sounds like a half-hearted attempt at reform.