Good news: Congress kills ethanol subsidy and tariff
E. Thomas McClanahanThis has to be one of the most under-covered stories arising out of Congress’ end-of-the-year scramble: The lawmakers allowed the tax credit for ethanol blenders to expire, along with a tariff that effectively kept out more efficiently produced foreign ethanol.
The measures died from inaction; they were scheduled to expire and Congress let them die. The handwriting was on the wall anyway. In June, the Senate voted 73-27 to terminate the subsidy and tariff.
The blenders’ subsidy extended a 45-cent subsidy per gallon of ethanol blended into gasoline. The tariff ended a 54-cent-per-gallon tax on imported ethanol, mainly from Brazil — which makes the stuff much more efficiently from sugar cane.
Will this kill the domestic industry? Not likely. Still in force is a federal mandate that requires a minimum amount of ethanol be used each year. In 2015, 15 billiion gallons must be used. The mandate rises to 36 billion gallons by 2036.
The blenders’ subsidy cost the taxpayers about $6 billion annually, and by some estimates the program, over its 30-year history, transferred some $45 billion to the ethanol industry. It’s always good news when a special-interest tax loophole comes to an end, especially one as wasteful as this one.
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Mark Hastert
4 months, 2 weeks agoNow if they will just kill subsidies for oil, gas and coal and add the combined costs of pollution up we’ll have a true reflection of what our cheap energy really costs.
Hillary Price
4 months, 2 weeks agoAs a representative for Growth Energy, I just wanted to point out that the ethanol industry has elected to give up its subsidy at the end of the year. If the progressively efficient ethanol industry can give up its subsidy, why can’t the century-old oil industry?
Joel Smith
4 months, 2 weeks agoShould also do away with the remaining mandate requiring even greater use of ethanol in upcoming years.
Rich Werning
4 months, 2 weeks agoMs. Price, as a representative for Growth Energy, what is your position on the mandate that forces consumers to consume your product? What is your stance on the current discussions with our federal govt requiring the increase in ethanol blend percentage?
Don’t give us the holier-than-thou act over the subsidy. Regardless of whether or not it’s there, we’re required to accept the inferior product that is ethanol gasoline. If not for that mandate, consumer demand for it would have disappeared years ago.
Kevin O'Brien
4 months, 2 weeks agoA good next step would be ending all “green” energy boondoggles. BTW the oil subsidy as you ignorantly call it isn’t exclusive to the oil industry, it is a tax break available to all businesses. I am all for ending subsidies and also ending gasoline taxes as well, then we will see what evil oil really costs.