Senate Votes To Repeal Ethanol Tax Credits
Cracks continued to in the ethanol industry’s once-impregnable political vanguard, as the San Francisco Chronicle reports that the Senate has voted to roll back the Volumetric Ethanol Excise Tax Credit (VEETC) as well as import tariffs on foreign-produced ethanol. This rollback of multi-billion-dollar ethanol credits failed earlier in the week, when the Detroit News reports automakers came out in opposition of a bill that would have required that 95% of all cars built in the US be capable of running 85% ethanol by 2017. The Senate did fail to pass a repeal of a government ethanol blending mandate that underpins the VEETC, however, and funding is moving forward for ethanol blending pumps. Still, the Senate’s repeal of VEETC alone means taxpayers could save over $5b per year on subsidies, and as one expert puts it
“Looks like we’re going to be relying on the biofuels mandates to make sure blenders use biofuels, rather than bribing them to use it with $6 billion,” [Bruce Babcock, professor of economics and the director of the Center for Agricultural and Rural Development at Iowa State University] said.
In fact, Babcock thinks killing the subsidy could help ethanol because it would come out from the stigma of being a subsidized industry. And removing the subsidy may strengthen support for the mandate, and the tariff on imports.
Over to you, House of Representatives…
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How about the political parties moving the first Presidential Primaries out of these corn states also. Put it in a different state (or group of states) every 4 years, that would be great for both parties and reduce the pandering.
Meanwhile in Germany: Government-mandated E10 gas is heavily opposed by drivers. According to an ADAC study 85% won't use it, 40% because not being convinced of environmental improvements, 36% fearing long-term damage, 10% fearing increased consumption. Prices for E10 are lowered now to increase the E10 appeal.
As with all govt. subsidies, edicts, or nudges---however benign they seem, or well intentioned: I just want to scream, NO MORE! Please beltway people, no more.
While traveling in South Dakota a few weeks ago, I noticed that MID-Grade was CHEAPER than the regular grade. Premium was still higher. I was not able to confirm it definitively, but it appeared that the regular did not contain ethanol while the mid-grade did. I've never seen mid-grade cheaper than regular, can someone confirm what is going on in South Dakota? This was not a freak occurrence at one gas station but noted consistently at many stations across different brands all the way from the Wyoming border to the Mt. Rushmore area.