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Leading Newspapers Call for End to Ethanol Tariff and Subsidies

by Joel Velasco on Jul 26, 2010

From inside-the-beltway to Wall Street to the heart of the farm belt, the plummet in support for ethanol subsidies and trade protection is on full display in some of the nation’s top newspapers. Recent editorials in The New York Times, The Washington Post, Wall Street Journal and Chicago Tribune — each calling for significant reform of U.S. ethanol policy — are another milestone in the groundswell of support for opening America’s renewable fuels market to real competition that will benefit consumers.

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From inside-the-beltway to Wall Street to the heart of the farm belt, the plummet in support for ethanol subsidies and trade protection is on full display in some of the nation’s top newspapers. Recent editorials in The New York Times, The Washington Post, Wall Street Journal and Chicago Tribune — each calling for significant reform of U.S. ethanol policy — are another milestone in the groundswell of support for opening America’s renewable fuels market to real competition that will benefit consumers.

Below are some of the highlights - and you can check out our interactive map for a look at additional editorial coverage from across the country.

The New York Times - Energy Subsidies - Good and Bad
Thursday, July 29, 2010

"... Congress should end tax breaks for corn ethanol, which can stand on its own and is of dubious environmental benefit.
"Ethanol, which in this country is made almost exclusively from corn, has been subsidized since the early 1970s ...  Refineries that blend the ethanol with gasoline now get a 45 cent tax break for every gallon they produce. That break is no longer needed.
"A 2007 energy law requires the country to produce steadily increasing volumes of corn ethanol — 11 billion gallons last year, rising to 15 billion gallons in 2014 — which guarantees a robust market for farmers and producers of ethanol. According to the Congressional Budget Office, the price tag last year for the ethanol tax break was about $6 billion.
"A bipartisan group of senators, have rightly begun to question the subsidy. So have many members of the House Ways and Means Committee. Even the powerful ethanol lobby is showing signs of cracking, with Growth Energy, an ethanol trade group, suggesting a four-year phaseout. It would be far better to end it now. There are many more useful ways to spend taxpayer dollars."


Washington Post - It's time to end the excessive subsidies for corn ethanol
Saturday, July 24, 2010

“When Washington starts handing out cash, it can be hard to stop. See, for example, the decades of subsidies the government has showered on the corn ethanol industry … But corn ethanol certainly doesn’t need the level of taxpayer support it’s getting. Lawmakers are considering whether to renew these expensive subsidies; they shouldn’t …
“The feds give companies that combine corn ethanol with gasoline a 45-cent tax subsidy for every gallon of corn ethanol added to gasoline. That’s on top of a tariff on imported sugar cane ethanol from Brazil and federal mandates requiring that steadily increasing amounts of these biofuels be produced …
“At this point, the question should not be whether to allow corn ethanol's tax incentives and trade protections to expire. The debate should be about why corn ethanol deserves any federal protection at all. There are certainly more effective ways to reduce oil consumption and greenhouse emissions.”


Chicago Tribune – Enough ethanol
Saturday, July 24, 2010

“Taxpayers have bankrolled biofuel research and a boom in ethanol production. Aggressive mandates have hiked the amounts of ethanol blended into the gasoline supply, and the industry is pushing for even higher levels of the corn-based fuel in each gallon. At the same time, trade barriers have kept out cheaper ethanol produced from sugar in Brazil and other countries …
“It's time to eliminate the tax credit. And before Congress even considers mixing more biofuel into the gasoline supply beyond the current 10 percent in each gallon, it needs to lift the protectionist barriers so ethanol brewed from foreign sugar can compete ... When it comes to ethanol, heavy subsidies and protectionism have proved to be a bad mix.”


Wall Street Journal – Survival of the Fattest
Monday, July 26, 2010

“The best refutation of the theory of the survival of the fittest is probably the corn ethanol lobby, whose annual $6 billion in federal subsidies have managed to outlive both its record of failure and all evidence and argument. So while we doubt another devastating study will result in any natural selection, recent findings from the Congressional Budget Office deserve more attention all the same.
“CBO reveals that it costs taxpayers $1.78 in ethanol "incentives" to reduce U.S. gasoline consumption by one gallon—or nearly two-thirds of the current average retail gas price. CBO also estimates that cutting carbon emissions by one metric ton via ethanol runs to $754. To put that number in perspective, the budget gnomes estimate that the price for a ton of carbon under the cap-and-tax program that the House passed last summer would be about $26 in 2019.”

copyright 2010 Brazilian Sugarcane Industry Association