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.