Senate Votes to End Ethanol Subsidies

That the Senate would in the span of a mere fortnight vote to fix two of America’s problems is enough to make one positively giddy. Shortly after refusing to delay the Dodd-Frank financial reform bill’s cap on debit card fees charged by banks, the Senate, in a coalition of both Republicans and Democrats, voted to end the 45-cent-a-gallon subsidy to the ethanol industry.

And they didn’t stop there: they eliminated the 54-cent-a-gallon import tariff that has doubly protected the ethanol industry. The subsidy, which costs U.S. taxpayers $6 billion a year, took the form of a tax credit to refiners for using corn ethanol even though they are mandated by law to use some form of ethanol anyway — 36 billion gallons of biofuels by 2022.

“Either we subsidize it, we protect it from competition or we require its use…[it is] the only product that receives all three. We simply cannot afford to pay the oil industry for following the law".

That was Susan Collins, Republican of Maine, on the Senate floor. The measure was championed by Sen. Tom Coburn (R-OK) about whose kerfuffle with anti-tax puppet master Grover Norquist we reported on earlier.

Corn was already the nation’s most subsidized crop when in 2007 legislators from the agricultural states pushed through the subsidy in the guise of reducing oil imports and the carbon dioxide it releases into the air. Ostensibly, plant products, which take in CO2 to grow, only return the ledger to zero when their CO2 is released back into the atmosphere when burned as fuel. But it was quickly realized – a study at Cornell led the way – that when all elements involved in the entire life cycle of corn ethanol are factored in (land clearing, fertilizer, and so on), emissions of CO2 are little different than oil. PlanetWatch.org explains that in “Biofuels Come a Cropper".

The consequences of the rush to ethanol have been still more damaging. Land clearance fells vegetation and trees, which releases their stored carbon into the atmosphere. Worse, corn diverted to running cars has created food shortages and driven up food prices. In countries like Mexico, where corn is a staple of the diet, there have been riots. So far, biofuels in general have proved to be more mistake than solution, covered in some detail here, in “Bloom Fades for Agrofuels”.