Industry News: Congress Allows Corn Ethanol Subsidy to Expire

[Drew Dowdell]

Drew Dowdell - CheersandGears.com

After 30 years, the ever increasing subsidy for ethanol produced from corn has expired. When Congress adjourned for the year last week, they did not renew the ethanol subsidy that has cost taxpayers some $45 billion during its lifetime. Every gallon of ethanol pumped provided corn growers with a 45 cent subsidy. Most of the savings from ending the subsidy to go towards reducing the US's budget deficit.

At the same time, a 54 cent per gallon tariff on ethanol imported from Brazil also expired. Brazil is twice as productive per acre of farm land by using sugar cane rather than corn. The expiration of the Brazilian ethanol tariff is unlikely to cause a rush of imported fuel as sugar prices in that country have spiked recently.

Earlier this year Congress blocked EPA approval of E15 gasoline for use in all vehicles from 2001 and newer. E15 is a blend of 85% petroleum gasoline and 15% ethanol. Automakers unanimously protested the use of E15 in engines not designed for ethanol saying that the effect of the fuel on older engines could not be predicted. They did not want to be blamed for any engine failures caused by the new fuel.

The ending of the subsidy clashes with a 2007 Congressional mandate that requires 15 billion gallons of bio-fuel be used in 2015 moving up to 36 billion gallons in 2022.

Source: GreenCarReports, Detroit News

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[Drew Dowdell]

I'm surprised not a single one of you commented on this. Ethanol has been a topic of hot debate on here for years.

[vonVeezelsnider]

We have two E85 stations in Canada and they are both in the Greater Toronto Area. Thus, despite having a Flex-Fuel car it does me no good in Calgary. Never used it. We don't have E-15 either as there are no ethanol subsidies in Canada. I guess based on a pure subsidy-free environment there's not much demand.

[loki]

yay! we have a lower tax(direct or inflation) burden and freer trade. WIN!!!!

congressional mandates are just that..... as coercive as taxes and just as immoral, therefore not a just law and should not be enforced

[regfootball]

like E10 and E85 as choices available to the consumer. In my state, E10 is mandated, that is what I hate.

I think farmers and anyone who wants to pump ethanol into their truck, burn what they grow is kind of cool.

But E10 and not having a choice of pure gas is like double taxation. You are paying to subsidize ethanol production, paying to use extra fuel you would not normally use. Triple taxation actually, too. You're subsidizing a lot of corn growing before it even sees an ethanol plant too.

[Drew Dowdell]

well... not anymore you aren't.

I like the idea of ethanol, but I hate that we've been forced to use just the corn version exclusive to all others. Corn is one of the worst ways to make ethanol, so hopefully now that the playing field is more level, the better, more efficient ways to produce it will come online.

[SoCalCTS]

we shouldn't be subsidizing corn or petroleum. its not like they are going to stop selling ethanol fuels.