Taxpayer Freedom from $5 Billion Ethanol Subsidies

It looks like the annual $5 billion federal ethanol subsidy is finally about to end.  This is a common sense move by the U.S. government–the tax credit actually goes to oil companies who buy the ethanol and blend it with gasoline.  Ethanol demand isn’t a result of any tax credit, either.  Federal law requires production of renewable fuels, so the market is essentially mandated.  There’s no sense in the subsidy no matter how you cut it.

Ethanol remains a complex issue even without the tax subsidy.  On one hand, corn production uses massive amounts of fossil fuels in planting, fertilizing, harvesting and processing.  Biodiversity is destroyed by millions of acres of corn–any monoculture is destructive, but corn is a heavy feeder and causes a lot of soil erosion.  What habitat remains gets tainted by fertilizer runoff choking out waterways near cornfields. Enviro Girl has read of some research in creating perennial corn crops that would alleviate some of these issues, but big players in the seed and fertilizer industry have a vested interest in keeping corn an annual crop.

Ethanol doesn’t necessarily mean using less fuel.  In fact, cars burn through more ethanol than equivalent amounts of gasoline, so while a tank of gallon is less expensive than a tank of gasoline, those savings don’t add up when you have to fill your tank more often to drive a car fueled by ethanol.

Still, ethanol burns cleaner than conventional gasoline and the main cause of climate change is linked to carbon emissions.  Americans are loath to give up their love of driving, so there is much to recommend making driving cleaner.  Leadership in finding solutions to reducing emissions is vital, whether driven by government mandates or industry innovation.  Who should lead the charge is a philosophical discussion for another post.  Enviro Girl hasn’t been convinced that ethanol is the answer to our nation’s fuel problems.  She also believes America’s energy problems require more than a single-prong solution.   No matter how you view this issue, Enviro Girl believes we can all agree that saving $5 billion is win-win.


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