The end of the ethanol subsidy?

After decades of your tax dollars, or, money borrowed from China, being used to subsidize ethanol, it appears that the subsidy will end on July 31.  The final details are still being negotiated, but, this is what we know so far.

We are currently giving gasoline manufacturers a forty-five cent per gallon excise tax credit for blending ethanol into gasoline.  The total cost of this program amounts to $6 billion per year.  When the subsidy ends, you can expect an increase in the federal excise tax of 4.5 cents per gallon for each gallon of E-10 you purchase.

But, don’t expect that this subsidy will completely disappear.  Under a “deal” negotiated by two farm state senators, and Senator Diane Feinstein (D. Ca.), of the $2 billion we will “save” through the end of the year,

about $668 million, would be used to extend a host of tax credits, including money for alternative-fueling infrastructure such as blender pumps at gas stations that let consumers boost the percentage of ethanol in the fuel they buy.

The “including” part of the above quote refers to subsidies for non-corn cellulosic fuels.  We have been throwing money at these ventures for years, and so far, we have little to show for it except an empty bank account.

Meanwhile, on Thursday, the Department of Energy announced,

 it would help finance the construction of the first U.S. major plant that would make ethanol that is [non-corn] cellulose-based.

This, of course, also will be done with money we don’t have.

Call me cynical, but, does anyone think that the above referenced $668 million “subsidy” will do anything but grow exponentially over the years? It sounds as if Congress just substituting one sacred cow for another.

14 replies
  1. Jim Vicevich
    Jim Vicevich says:

    This is why they cannot be stopped by electing anything but true Tea Party type conservatives. Perhaps not even then. The tax code represents power. Legislators will never legislate away their power.

    Feel that sinking feeling yet? Remember when the world is run by vampires you are simply a donor in waiting.

  2. sammy22
    sammy22 says:

    Phyllips 66 sells gas free of ethanol. Guess what: the price is higher than the gas with 10% ethanol.

  3. Gary J
    Gary J says:

    I agree Jim. They feel great leaving you with a few cents on the dollar you have earned. They used to call people that didn’t pay their taxes?”tax cheats” now I say the feds,states and towns are the cheats. All we want is to keep some of what we earned. Only thing we’re lacking now is a wall……..?

  4. johnboy111
    johnboy111 says:

    sammy22[I guess you don’t own a landscaping business where all our equipment is being ruined by this “blend”]? save the earth???? screw the people?

  5. Plainvillian
    Plainvillian says:

    Ethanol was never about anything but buying farm belt votes.? Even the pied piper of the goose stepping environmental despots, Algore,? now admits ethanol is a bad idea.? Ethanol blended gasolines require more energy to produce than they save and the reduced miles per gallon makes our cars less efficient so we end up using more motor fuel.? Is this an inconvenient truth or what?

  6. ricbee
    ricbee says:

    Ethanol was never about anything but buying farm belt votes. But the house hasn’t passed it yet & the flipflopper could veto it.

  7. johnboy111
    johnboy111 says:

    sammy22 1/2 no phillips station near me..shall I drive my 11000 pound truck 400 miles to get said product???no I can’t hall my equipment with a prius or volt…

  8. winnie888
    winnie888 says:

    @johnboy111–no, the answer is clear…As an evil business owner, you should BUY Phillips Petroleum and build a station next door to where you store your 11000 lb truck.? Problem sol-ved.? Now, “stop whining”.?

  9. Tim-in-Alabama
    Tim-in-Alabama says:

    I’ll borrow a line from Al Gore and the Gorons – there can be no more debate on this issue. Ethanol is a bad idea, and this subsidy should be ended. But … and it’s an awfully big but … in fact it’s a huge but … it can be nearly impossible to stop something once the government creates it. Insidious programs like this exist in perpetuum

  10. johnboy111
    johnboy111 says:

    I do not know if I can ever make it thru the permitting process with this crowd in office??? OH WAIT I CAN CALL JOHN? [HEINZ] KERRY FOR HELP…..

  11. Lynn
    Lynn says:

    johnboy, unfortunately you must just stop working. When you have NO money the govt. will take care of you

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