With 2011 a month and a half away, the ethanol industry is pushing full steam ahead for a renewal of the tax credit and tariff provided to support the industry. There seems to be ample opportunity to push this legislation, as it could be attached to either any energy or tax legislation that makes it way through Congress. Rent-seeking lobbyists and politicians are out in full force hoping the river of cash doesn’t run dry:
A group of senators have pressed Harry Reid over concerns that the expansion of ethanol is being constrained by “marketplace limitations.” It also implies that eventually the ethanol industry will be ready to leave the government teat, though we must ensure this isn’t done prematurely and that there is ample time for “broader discussions” on how to address the limitations facing biofuels (hint: they aren’t cost competitive).
The ethanol lobby is also out in full force, attempting to scare politicians over potential job losses. Should they get much attention to their cause, the U.S. will be seeing increased amounts of flex-fuel vehicles and billions of dollars wasted to fund ethanol pipelines and pumps around the country.
Finally, Senator Harkin (D-Iowa) threatened to oppose electric vehicles if his colleagues don’t support biofuel policies. Politics at its best. Let’s hope they can’t come to an agreement and stop the subsidies for both.
Need another reason to oppose ethanol subsidies? We are now subsidizing European drivers because our ethanol producers are receiving tax credits for ethanol exported to the EU.
Image credit: Rascaille Rabbit’s flickr photostream.