A column by Doug Cameron in today’s (June 20, 2007) Financial Times (”Animal plan incites pork-barrel politics“) provides more evidence (as if any were needed) that energy politics in the nation’s capital are driven by pork (legal plunder) and anti-fossil fuel demagoguery.
A provision in the 2005 Energy Policy Act provides a $1-a-gallon tax credit for production of biodiesel fuel. Most lawmakers expected biodiesel to be made from vegetable oil, generating profits (at taxpayer expense) for farmers. But lo, other clever people figured out how to cash in. Oil giant Conoco-Phillips teamed up with poultry giant Tyson Foods to make biodiesel from animal fats.
A veritable food fight has broken out:
The [Conoco-Tyson] plan has managed to upset just about everyone but its backers. Animal rights activists claim it would push more cows towards Tyson’s abattoirs. The National Biodiesel Board argues that the entry of oil groups such as Conoco would spell doom for dozens of small producers. Even the Soap and Detergent Association has weighed in, saying that the diversion of its core feedstock could make the industry extinct.
“The subsidies have created demand for something [animal fat] that wouldn’t have been there,” said an economist quoted in the article. Say it ain’t so, Joe, say it ain’t so!
Of course, what the economist said about chicken and cow grease, goes in spades for ethanol itself. Without “a 51-cents-a-gallon ethanol subsidy, as well as assorted state benefits and 54-cents-a-gallon import tariffs,” there would be little demand for ethanol and no national market for it.