By on December 27, 2011

After spending thirty years and $45 billion dollars encouraging the use of ethanol the United States Congress has adjourned for the year without extending tax subsidies to the to ethanol industry. The subsidy currently costs taxpayers $6 billion a year. A related import tariff on Brazilian ethanol was also allowed to expire. With a wide group of critics, cutting across political and ideological lines, the tax break had become unpopular in Washington. Business interests in the food and cattle industry as well as environmentalists opposed the law which paid 45 cents per gallon to fuel blenders to subsidize their costs for producing E10 gasoline/ethanol blend. The subsidy resulting in corn being diverted from feedlots and food processors to ethanol production, raising the cost of many foodstuffs. The environmental movement now opposes corn ethanol as a fuel it because it considers the fuel and its production to be “dirty”, in the words of Friends of the Earth.

Ethanol trade groups have said that the industry would survive the loss of the subsidy, now that the US ethanol production industry has become established. The industry is still protected by congressional mandates that call for 15 billion gallons of renewable fuels by 2015 and 36 billion gallons by 2022.

The ethanol issue involves a number of powerful players, corn growers and affiliated industries on one side and food interests, automakers and engine builders on the other. Then there’s the EPA to consider. The EPA has approved the use of E15, an 85/15 gasoline/ethanol blend, for use in post 2001 cars. Manufacturers say that without modifications, E15 will damage engines. In February, in a bipartisan move the House voted 285-136 to block the EPA from moving ahead with E15 regulations.

While ending the subsidy would seemingly discourage ethanol’s use, the end of the 54 cents per gallon tariff on imported Brazilian ethanol might do more to encourage that use than the subsidies did. Brazil is one place where it makes sense to use ethanol as a fuel because of Brazil’s huge sugar industry. The ratio of energy needed to produce it vs the energy obtained in the fuel for ethanol made from corn is barely greater than one, 1.3:1, compared to 2:1 for using sugar beets and 8:1 for sugar cane, the feedstock for Brazil’s ethanol. It costs half as much to make Brazilian cane ethanol as it does to make American corn ethanol. According to one academic study transportation costs to US ports eliminate that competitive advantage, but if that was a certainty, Brazilian sugar cane producers wouldn’t have threatened to start a trade war if the tariff wasn’t ended.

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74 Comments on “U.S. Congress Stops Ethanol Subsidies & Tariff on Brazilian Imports...”


  • avatar
    carguy

    About time. While we’re at it, can we also do that for the petroleum industry and makers of electric cars?

  • avatar
    Educator(of teachers)Dan

    Hope this change sticks.

    • 0 avatar
      mike978

      I would hope so, since it has expired re-establishing it will take more effort. Plus the $6 billion will need to be paid for since that is the current approach for things like the payroll tax cut etc. Finding $6 billion to cut to pay for this will be difficult (as opposed to other more popular tax subsidies or cuts).

      • 0 avatar
        highdesertcat

        Mike978, the refiners will just raise the cost of a gallon of gas by the amount of the subsidy. In NM that’s about 7-cents per gallon of E-10 and about 9-cents per gallon of E-15.

    • 0 avatar
      Felis Concolor

      As someone who drives an automobile using a gasoline engine more than 10 years old, I am especially grateful. Take that, Grover Norquist!

    • 0 avatar
      Steve65

      Sorry, but since the mandatory sales quota is still in place, killing the direct subsidies will just increase the price at the pump. To REALLY kill the ethanol boondoggle, we have to get congress to stop trying to force it onto the market in defiance of what people really want.

      • 0 avatar
        Patrickj

        Actually, it should have no effect on the price at the pump.

        In the absence of price controls or total payment by the third party (another can of worms), a subsidy paid by a third party is pure profit to the recipient. It doesn’t lower the price paid by the buyer, whether it is college tuition, ethanol, or healthcare.

        The gallon of gasoline is still worth $3.20 or so to the buyer, whether the seller is paid zero cents, 53 cents, or $53.00 per gallon of ethanol added to the gasoline.

      • 0 avatar
        stuki

        Patrickj,

        If I was paid $53/gallon, for every gallon of gas I sold to someone, you could bet your rear end I would sell it cheap enough to make it worth vile for every schlub within a 1000 miles to buy their gas from me…

        As long as “many” sellers get the subsidy, (almost) all of it will get passed along to consumers; as competition drives rices down to meet costs. But even if only one seller gets it, it will change his cost curve in such a way that at least some of it gets passed along.

      • 0 avatar
        Patrickj

        @Stuki
        Prices are connected to cost only in that a seller can’t sell below cost indefinitely and stay solvent. After break-even, prices are determined by what buyers are willing to pay, not what the product costs to make.

        Especially for a product where demand is nearly inelastic, like gasoline, subsidies have little or no effect on prices to the customer. Subsidies may promote non-price competition that helps the customer very little, like fancy athletic facilities at colleges or minor gasoline discounts by grocery chains, but do not affect the buyer/seller interaction directly.

      • 0 avatar
        Herm

        The gasoline blenders (refineries) themselves have admitted that it wont affect them much, they just pass the cost along to the ultimate consumer..

        Let the market decide if Brazilian sugar cane ethanol is really cheaper.. its probably only a little cheaper compared to the latest ethanol mills that are using corn cobs as a source of industrial heat.

  • avatar
    Truckducken

    Congress did something right? I am highlighting this day in my calendar.

  • avatar
    ExPatBrit

    Iowa caucus next week?

    Which candidate(s) will come out for Ethanol subsidies?

    Someone please explain why Iowa should go 1st?

    • 0 avatar
      Syke

      Traditionally, the state of New Hampshire has always had the first presidential primary election. Something important enough, that there’s a state law that will move the primary forward automatically if some other state changes their date to be in front of New Hampshire. And obviously, you can only have a primary move so far on the early side before it starts getting ridiculous. Like trying to keep all the primaries in the same year as the general election.

      Iowa got around that by quietly doing a state-wide caucus, which is a bunch of local meetings where the supporters of a candidate get together and are counted (nothing to do with paper ballots, voting machines, voter registration, etc.). All the individual caucuses are counted together, and you end up with a winner.

      New Hampshire never really worried about this, as it wasn’t taken seriously, and there were still the first primary with the state laws to back that up. In 1976 this all changed when Georgia Governor Jimmy Carter (up to that time a real also-ran candidate for the Democratic nomination) went into Iowa gangbusters, won the caucuses, and got enough media coverage out of it to give him the momentum, which propelled him into the Presidency the November. Ever since, Iowa has become a big deal. Actually, a way over-big deal. No other state in the primary circuit comes to bat with such a small, marginally representative bunch of voters as Iowa.

      Personally, I really believe that the system needs shaken up so that EVERY state has a chance to be the first primary/caucus in rotation. Once you’re state has been first, you don’t get to do it for another 200 years. Then the candidates will eventually have to face the full gamut of American voting public, not just a small bunch of fundamentalist, conservative farmers.

      • 0 avatar
        Neb

        Well said. Lots of people have thought the same thing; to the point of suggesting of rotating primary state order by region. (North-East first one election, South first next election, etc.) But there’s a lot of resistance, mostly from the states that benefit from the system now. Michigan in the democrat primary in 2008 moved itself ahead unilaterally and as a consequence had itself stripped of delegates. (Later half of them were restored, but yeah, they were punished for trying to get more influence.)

      • 0 avatar
        machinegear

        “not just a small bunch of fundamentalist, conservative farmers”

        Hello? Can you hear me from inside your bubble? Farmers in Iowa are faaar from “conservative”. They may be traditional in their appearance and life style but they are far from God fearing, Constitution abiding individuals. Farmers LOVE their government paychecks coming in the form of CRP payments, disaster assistance, taxpayer backed crop insurance, and even direct payments straight out of the Treasury’s coffers. These folks behave and vote no different than the welfare hooked black man in the intercity. They both vote to keep the game of “steal-by-politician” alive.

        By God. In your own rambling you even noted that Iowa backed Jimmy Carter for President. Do you REALLY think that is what a “conservative” would do? Back a socialist? How about Obama? A marxist. Yeah. He won Iowa with 54% of the vote. One more. Iowa’s very own senator is Tom Harkin. According to Progressive Patriots (as if there is such a thing), Harkin earned a progressive action score of 63 and a right-wing index score of 0! And he has served Iowa farmers and their local liberal interests since 1974!

        Dude, if you want to bash Iowa. Do it right. Bash Iowa for being liberal Methodists that love cashing government checks so they can buy their next Ford King Ranch pickup truck.

      • 0 avatar
        Jimal

        @machinegear, such is the peril of putting labels like “conservative” or “liberal” willy-nilly on people. While as a block Iowa farmers are fiscally liberal in that they love their government subsidies, from a social perspective they are about as conservative as they come; just about all Iowans are. Life (and politics) are a little too complex for that.

  • avatar
    dismalscientist

    This is great news, for reasons unrelated to cars. Ethanol subsidies have been linked to increases in the prices of foodstuffs [1]. It’s not apparent though how ethanol production will be affected. Seems like “0″ would be the ideal amount, given its ineffectiveness, inefficiency and its effect on food prices, but it may be competitive given high gas prices unfortunately.

    According to recent news, Brazil is now a net *importer* of ethanol [2].

    [1] http://www.nytimes.com/2011/06/25/opinion/25Rattner.html
    [2] http://www.businessweek.com/news/2011-11-22/brazil-to-become-net-importer-of-u-s-ethanol-czarnikow-says.html

  • avatar
    burgersandbeer

    Does this mean I can look forward to not having to fill with E10, or is the Brazilian ethanol going to keep it going?

    I was very happy with this story until the last paragraph.

    • 0 avatar
      APaGttH

      We can only dream.

    • 0 avatar
      highdesertcat

      The only way would be for your state, and others, to retract that mandate for blending gas with 10% or 15% ethanol.

      The refiners will pass on the added cost of the unsubsidized alcohol to the consumer. In NM it is anticipated to be around 7-cents for E10 and about 9-cents for E-15, per gallon.

      That’s why so many people in border states (TX, NM, AZ, CA) cross over into Mexico and buy that good ol’ PEMEX gas for $1.50 a gallon, and without ethanol!

      • 0 avatar
        Educator(of teachers)Dan

        That’s why so many people in border states (TX, NM, AZ, CA) cross over into Mexico and buy that good ol’ PEMEX gas for $1.50 a gallon, and without ethanol!

        Rrrrrright, whipping out our passports for the privlage of doing it. Count your pesos carefully, Amigo.

      • 0 avatar
        highdesertcat

        You’re a little too far north to make it worth your while, Dan. But for those living near the border, crossing the border is no problem. I used to do it whenever I was visiting El Paso, but I don’t anymore since I bought my Tundra.

        In El Paso, TX, alone, thousands of people cross every day, in both directions. Many Mexicans actually hold down jobs on the US side of the border and many Americans work on the Mexican side of the border in the Maquiladoras and other factories.

        I hired Mexicans from Juarez when I built my house and they came across with spare gas cans loaded with gas because they didn’t want to pay the higher price in the US. Several of them hauled up trailer loads of tile and grout from Mexico for my house.

        It’s where they spend their money that counts. And gas is much cheaper south of the border. That’s why hundreds of people fill up each and every day south of the border.

  • avatar
    jaje

    Brazilian ethanol will become much more available as it is substantially cheaper to produce (Brazil is a net exporter of fuel) as they harvest it from sugar cane scrap (which grows well in Brazil but poorly in the US). But it is about time this went away. Now we’ll see less “throwback” soda products for sale as HFCS will get cheaper than sugar again.

    • 0 avatar
      stuki

      If transportation costs from Brazil is what’s making cane ethanol uneconomical, what about dropping that Alberta-Houston pipeline in favor of a Rio-Houston ethanol one? Protecting that one, ought to give our warmongering overlords one heck of a reason to insert our fighting men in almost every troublesome country in the hemisphere.

  • avatar
    gslippy

    Maybe the Elantra (& friends) can start getting 40 mpg again, without all the E10 on the market. I would attribute some of the “Hyundai lied, gas mileage died” rhetoric to the widespread use of E10.

    • 0 avatar
      spinjack

      Manufacturers should publish MPG ratings for each of gasoline, E10, and E15. That would kill all this ethanol nonsense pretty quickly.

      • 0 avatar
        Russycle

        +1000

      • 0 avatar
        PhilMills

        I was in the lobby of the local GMC/Buick/Honda dealer while my Saturn got an oil change. They had some “FlexFuel” vehicles on the floor and those had ratings for both “normal” gas as well as E85.

        I had known that E85 didn’t have as much energy in it, but I was pretty shocked to see how different the estimated mileage on a tank of it was from running on regular. I was doubly-shocked when I filled up my car a few days ago and saw that the station had E85 and regular at the same price. Without that subsidy, I can’t really see E85 going very far (pun intended) in the market with that kind of a performance difference.

  • avatar

    How good this is depends on how it comes out. We don’t want to be encouraging more production of Brazilian ethanol by importing the stuff because that will put more land into cultivation, which (in most Brazilian landscapes with the exception of certain grasslands) would lead to huge carbon emissions when the forest is turned into agricultural land. This creates a “carbon debt” which takes more than 100 years to repay through renewable fuel. In some cases, it can take up to 400 years. When you include carbon debt, placing new land into cultivation for alcohol fuel is worse than burning petroleum. http://ehp03.niehs.nih.gov/article/fetchArticle.action?articleURI=info%3Adoi%2F10.1289%2Fehp.116-a246

    But it is certainly good to end the US subsidy.

    • 0 avatar

      Playing devil’s advocate, David, does that mean we shouldn’t put more land into cultivation for food as well?

      What’s a little starvation when we have the planet’s future to consider?

      /sarc

      • 0 avatar

        It means we should stabilize the population.

      • 0 avatar
        krhodes1

        We need to REDUCE the planets population.

      • 0 avatar
        TEXN3

        Are you signing up you and your family to go first, or do expect population “thinning” to come from somewhere else?

      • 0 avatar
        Rod Panhard

        We have too many people and too many bombs. Need I say more?

      • 0 avatar
        wallstreet

        I guess you all are for legalizing same sex marriage.

      • 0 avatar
        highdesertcat

        Wallstreet, funny you should mention that since I just heard a story from my daughter (a nurse) about two guys who had the sister of one guy deliver a kid fertilized in vitro by the other guy, at the hospital here she works.

        And then there was the story about the two lezzies who decided to visit a sperm bank and get pregnant together and insisted on delivering at the same time, at that same hospital?

      • 0 avatar

        David,

        Making a society rich seems to do a pretty good job at stabilizing populations. The wealthiest countries seem to have the lowest birth rates.

        I’d rather encourage economic development than some kind of eugenics-like Godwin-evoking all-caps zeal to eliminate humans.

      • 0 avatar
        ihatetrees

        It means we should stabilize the population.

        Why does the population control crowed always consider extra productive people to be a net negative in their crabbed little ledgers?

        A major demographic problem of the democratic West is too few people…

      • 0 avatar
        krhodes1

        @Tex3n

        Yes, we seem to be doing our part. I have no intention of reproducing, my brother has one child and does not plan to have any more.

        Fewer people, more resources to go around. I actually think George Carlin said it best though – “at some point, Mother Earth will shake us off like a bad case of fleas”.

        @wallstreet
        I think you should be able to marry your dog, assuming that your dog wants to marry YOU! What business is it of yours who I marry? I very much doubt I will be marrying you.

      • 0 avatar
        stuki

        ihatetrees,

        A major problem everywhere, is that there are too few people like us, and too many of them uther ones.

        Regardless, peak oil will simultaneously reduce both CO2 emissions and human populations more effectively than either uncle Adolf or Al Gore could ever dream of. May the least oil dependent, and/or the one least squeamish about grabbing whatever oil is there, survive.

      • 0 avatar
        wallstreet

        Ligthen up Mr. krhodes1 ! I didn’t initiate this population control cr*p. My dog was a loyal & faithful member of my family. I enjoyed every moment when she was around. I would have ordered an E91 just like yours had she not leave us so soon.

        Please don’t propose to me in public, I love kids.

      • 0 avatar

        Ihatetrees writes: “Why does the population control crowed always consider extra productive people to be a net negative in their crabbed little ledgers?:

        In fact, the west doesn’t have enough water for the people who live out there now.
        http://www.nytimes.com/2007/10/21/magazine/21water-t.html?pagewanted=all

        As for your “extra productive people…” have you ever heard of the law of diminishing returns? It’s basic economics. Do you think that with 7 billion people in the world, we really need more? When even in the US, so many are POORLY EDUCATED?

        @Ronnie: the population is projected to increase by 2050 by roughly the number that existed in the world when you were born (2.5 billion). We don’t have time to sit back and let increased wealth do the job by itself, especially when so many more people are likely to contribute to poverty, and even famine.

      • 0 avatar
        carbiz

        The elephant in the room is the fact that half the world’s population lives in Asia and South Asia. Thanks to television and now the internet, they want what we have. That is the real issue. We in the West could buy every family 5 SUVs and drive them to pick the newspaper up at the end of the driveway and we could not come close to the what Asia and South Asia could consume if their economies keep expanding.
        Ronnie – I grew up on Star Trek, too. In the land of rainbows and unicorns, I hope you are correct. However, it is unlikely that Asia and South Asia’s populations will decline by 30% in the next 30 years (although a good ol’ fashioned war could change that), but it is very likely that their standard of living will increase by that or more.
        Perhaps we will get lucky and technology will keep one step ahead, but if you look at China’s buying patterns of the past decade, they are positioning themselves to be proud owners of many of the world’s most sought after resources.
        America uses bombs to secure resources; China uses America’s money and jobs to just go and buy what it needs. Communism beating Capitalism at its own game. Go figure.

        Highdesertcat – huh? Were you trying to be funny? Personally, I don’t understand why anyone, hetero or homo, would deliberately inflict children upon themselves or society as a whole, but to each their own.
        As to gay marriage, I do remember reading a book (or was it a short story?) a very long time ago about just that: a civilization that had avoided collapsing under its own weight by promoting homosexuality and gay unions.
        Whatever. I’ve always said, with divorce rates over 50% now, why would gay people clamor for something that clearly doesn’t work for anybody else either?

      • 0 avatar
        CJinSD

        We’re getting perilously close to the day when the genocidal misanthropes take off their environmentalist masks.

      • 0 avatar
        highdesertcat

        carbiz, I wasn’t trying to be funny. Both are true stories.

        Many homosexuals also want to have children and since they cannot reproduce naturally they often turn to adoption, or surrogate donors like sisters, or hire a surrogate for money. It’s all done legally.

        My daughter was married to a bi-sexual guy and that union produced one child. The boy turned out feminine but he can’t help it. That marriage came to an end when she caught her husband canoodling another guy in their bed when she came home early from her job one day.

        She is now happily married to a career Marine on active duty and has two other children by him. She works at a large hospital in the San Diego area that supports a sizable population of homosexuals in that area.

  • avatar
    tparkit

    “The industry is still protected by congressional mandates that call for 15 billion gallons of renewable fuels by 2015 and 36 billion gallons by 2022.’

    Perhaps the single most effective step toward ending that situation would be for the Tea Party & allies to defeat Sen. Lugar in the next primary. Very difficult to knock that entrenched RINO punk out, though… he has been buying friends with our money for decades.

  • avatar
    wallstreet

    I love diesel ! I’m so blessed to have an oil burner as daily driver.

  • avatar
    jerseydevil

    about effin time

  • avatar
    Sundowner

    I’m pretty sure I have a problem with this plan. I don’t care for the ethanol in my fuel, but I don’t want to encourage Brazil to slash and burn more rainforest so we can keep affordably filling our SUV’s either. And just from an uninformed observer’s point of view, the whole ethanol vs. food stuffs debate is complete bull crap. They could make the fuel 30% ethanol and the buying public would still manage to buy food and soft drinks loaded to the hilt with corn syrup. I find myself without pity.

    • 0 avatar
      dwford

      Every fuel has its drawbacks. We could switch to natural gas, if we don’t mind the fracking poisoning the wells, more oil, more spills, electric cars powered by coal, nope thats no good, ugh!! I’d buy a bike, but exhale significant amounts of CO2 myself, so that’s a fail. Pick your poison.

    • 0 avatar
      ihatetrees

      Personally, I could care less about how much of whatever fuel I burn. Tax every fuel to cover the damage it does (yes, this IS endlessly debatable/political).

      That said, a True Environmental Fundamentalist would be pro-nuclear. There is no other way to power a modern society.

      • 0 avatar
        golden2husky

        At least what you propose is fair. If somebody wants to rant that they are entitled to burn what the want, well if all the indirect costs are covered, burn away. I personally couldn’t do so but if your truly paying your way, go for it.

        Like it or not, fission is the only source of energy in the near term that will be able to meet the world’s energy demand. So, you are correct there. However, the constant push for alternatives must be made. The problem is how to prevent the political poisoning from getting in the way…I certainly accept that subsidies are going to be part of the process, but how about a little science first? In the case of ethanonl (great link by the OP by the way, despite the water use typo) it was pretty clear that energy in (US farming and fertilizer production is highly energy intensive) exceeded the energy values of the offset petroleum. That alone should have made this a non-starter. Then you add the environmental damage, plus the food issues and you wonder how people could have been so foolish. Politics, again…

      • 0 avatar

        If fission could meet the world’s demand, it would be on its way to doing it. But China is building coal plants, not fission. Fission is stumbling all over the world under the weight of its own expense.

        Furthermore, electricity only amounts to about 20% of energy use in developed countries, and it is inapprpriate for most of the rest.

        Finally, if the US concentrated on building renewables capacity the way it concentrated on tanks and planes during WWII, we could probably replace most of our coal and oil with renewables pretty quickly.

      • 0 avatar
        ihatetrees

        But China is building coal plants, not fission. Fission is stumbling all over the world under the weight of its own expense.

        Fission is also stumbling because of political problems.

        Coal plants are cheaper, so China builds them. China has a nuclear deterrent and a brutal police state to keep Kyoto Types and other Regulators from making their coal expensive. From a cost perspective, this makes sense.

        The USA is going the other way regarding coal. Worse, if the current pipe heads at the EPA have their way regarding ANY TYPE of new plants, adding significant generation capacity in the US will be very expensive.

      • 0 avatar
        carbiz

        Oh, I dunno: Patrick Moore (one of the founders of Green Peace) has a lot to say about the nuclear industry today…..

  • avatar
    daveainchina

    I think it was a bit overdue to end it, but I’m glad that we both had the subsidy and that it is now ended.

    The subsidy allowed an industry to be created, now it remains to see if that industry can be competitive enough to survive on it’s own. Sometimes governments need to help an industry get off the ground but then they need to stand back and see if it can survive on it’s own.

    Overall I’m happy with how this played out. Success or failure doesn’t bother me, what would’ve bothered me would’ve been not trying this at all.

  • avatar

    the orings just went out on at least one of my fuel injectors.
    Thanks Barack Obama.

    The corn farmers made a big campaign in N. Dak. Huge billboards
    showed an oil sheik on the left side and a good old american farmer on the right. You were then asked to make your choice.
    Another billboard proclaimed ” Sure-starting ethanol”. You see up there cars have a hard time starting in the winter, and as alcohol is less energy dense than gas, cars would barely start on the new fuel.
    the solution: an ad campaign telling people that yes, your car will
    still start on the crap.

    The engine rebuilders in the marine industry say they have never
    had so much business as the boat motors were never designed to run on ethanol.

    we were sold a bill of good with this product. Say, do you know why
    the farmer has a curve in the bill of his hat? It is from looking in the mailbox everyday for a government check.

    • 0 avatar

      You can’t blame that on Obama. The subsidy has been in place for 30 years. I’m opposed to a good deal of what Mr. Obama wants to do, but the ethanol thing isn’t entirely his fault. He’s a statist, no doubt, but the corn ethanol boondoggle started back when he was in law school.

      • 0 avatar

        I suppose you are right. I knew ethanol was wrong when I saw
        George Bush Jr. with his hand on the handle of an ethanol based
        fuel pump, and said : this here is the future. I then knew that,
        with an oilman endorsing it, there would not be one less drop of
        oil consumed.

        But I don’t know that archer midland daniels was flying Busch around in a corporate jet for HIS campaign.

        Either one of the SOBs could afford to change out their fuel injectors, I am sure.

  • avatar
    theonewhogotaway

    Frankly more of a political news than car news story… (this cut balances the extension of the social security tax cut in the politics realm.) Unless there are some gas stations around here that would offer 100% gas (with no booze added) so my daily 18 year old driver would ride in peace, not much of a story (other than politics… sorry)

  • avatar

    this is good move, cut all the subsidies, get those tax money back and rise the tax of the New Car 2012 a bit then lets see what happens LoL..

  • avatar
    John R

    Maybe this could be an in for Cane farming in Florida, Cali and Hawaii?

  • avatar
    golden2husky

    Nobody said it, so likely nobody read all of it: Great link…

  • avatar
    grzydj

    Is the end of corporate welfare near? Not by a longshot, but it’ll be interesting to see how this all pans out with other industries.

  • avatar
    obbop

    Did Cargill quit hiring enough out-of-office federal-level politicians and retiring bureaucrats?

  • avatar
    thx_zetec

    This surprises me, usually Federal government decision can always be predicted by simple rule: it will always act such that deficit is increased.

    That said, there is still plenty of ethanol boondoggle left. Consider

    _1 A law mandating ethanol in fuel regardless of how uncompetitive it is. Can you say centrally planned economy?

    _2 The bio-ethanol super boondoggle. Bio-ethanol is called “next generation” ethanol because it beats regular ethanol is all categories: even more expensive, even bigger subsidies, and even more outrageous centrally-planned mandates. Recently the feds had to admit that bio-ethanol goals are not feasible.

    BTW regarding “subsidies” for oil: the oil industry pays tens of billions in taxes (vs. zero for GE) and does get some tax relief. I would agree that corporate tax policies are too complex, but comparing the oil industry (which pays taxes and would be competitive regardless of tax policy) to the ethanol industry (a hot-house flower that would wither if pulled from the taxpayer teat) is pretty silly.


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