Wednesday, June 03, 2009

Congress’s Idea of Green Fuel: Subsidize Corn Ethanol $.43/gallon

The Obama Administration is pushing a big expansion in ethanol, including a mandate to increase the share of the corn-based fuel required in gasoline to 15% from 10%. Apparently no one in the Administration has read a pair of new studies, one from its own EPA, that expose ethanol as a bad deal for consumers with little environmental benefit...The biofuels industry already receives a 45 cent tax credit for every gallon of ethanol produced, or about $3 billion a year. Meanwhile, import tariffs of 54 cents a gallon and an ad valorem tariff of four to seven cents a gallon keep out sugar-based ethanol from Brazil and the Caribbean. The federal 10% blending requirement insures a market for ethanol whether consumers want it or not -- a market Congress has mandated will double to 20.5 billion gallons in 2015....The Congressional Budget Office reported last month that Americans pay another surcharge for ethanol in higher food prices. CBO estimates that from April 2007 to April 2008 "the increased use of ethanol accounted for about 10 percent to 15 percent of the rise in food prices."...Ethanol's Grocery Bill, Wall Street Journal, 6/2/2009

What is the game here? The impact on food markets in the developing world, largely caused by doubling of corn meal prices, was so dramatic in 2008 that there were massive food riots in India, Africa, and the Caribbean. And now we're to have more? This is change? To benefit whom? The few who milk the federal government for a fuel that's not environmentally desirable and delivers less than half the energy of gasoline? Who's kidding whom?

This is nothing but a rich man's subsidy that is wreaking havoc with poor people's food and the people's tax money. it's no different in kind, or in corrupt intent, than the farm subsidy that props up corporate farm millionaires.


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