Ending Ethanol Subsidies

The Senate voted 73-27 to repeal the $5 billion annual subsidy, just two days after rejecting an identical measure. The tax credit provides 45 cents a gallon to oil refiners who mix gasoline with ethanol, a renewable, liquid fuel additive that comes mainly from corn in the U.S.

The Senate voted last week to end $5 billion in subsidies for corn ethanol. This is a good thing.

I’m all for alternative fuels. I’m all for biofuels. But corn ethanol in America is a propped up industry that is raising the price of corn. This rise in corn feed is creating a rise in prices for other types of grains. The states is only seeing this through a few extra cents on a loaf of bread. But in the middle east (where I currently live) I’m seeing prices of bread double (the bread only costs a few cents in the first place).

Government subsidizing of corn ethanol has had so many unintended consequences it should have been stopped a long time ago. Let me name a few:

  • Grain prices are now tied to the volatility of fuel prices
  • The massive increase in corn planting (a row crop) is created more soil erosion
  • Row crops also allow a far larger amount of nitrates to entire the watershed
  • We need to be exploring sustainable forms of alternative fuels and biofuels. Boeing is doing just that.

    A final excerpt:

    The measure passed Thursday would end the tax credit immediately. It would also repeal a 54-cent-a-gallon tariff on imported ethanol, which restricts imports, mainly from Brazil.
    “The best way for ethanol to survive is to stand on its own two feet, without spending something we don’t have to get something we’re going to have anyway,” said Sen. Tom Coburn, R-Okla.

    Coburn nailed it. I sure hope this passes in the House as well.