VEETC

The basic math is pretty simple: most gasoline in the U.S. has about 10 percent ethanol, so the the 45 cents/gallon VEETC subsidy reduced the price of gasoline about 4.5 cents. The subsidy expired at the end of 2011, so one reason gasoline prices have gone up a few cents since New Year’s Day comes from the loss of the subsidy. (World...[read more]

Americans want the U.S. to lead the world in renewable energy, but these are screwy times in our nation’s capital. Some people are trying to turn clean, renewable energy into something dirty. The fossil fuel industry and the radical right, including Grover Norquist and politicians looking to score cheap political points, are taking on...[read more]

The most recent Green Scissors report is out, recommending hundreds of billions of dollars in subsidies that could be cut to reduce the budget deficit and improve our environment.  Green Scissors provides a host of useful proposals to save tens of billions of dollars annually by eliminating unnecessary, environmentally harmful...[read more]

The current tax credit for blending grain ethanol into gasoline, the Volumetric Ethanol Excise Tax Credit (VEETC), has outlived its usefulness. That's not just because I consider it unwise to subsidize any industry to such a generous extent for more than thirty years, but also because the passage of the ambitious federal Renewable Fuels...[read more]

Over the next two posts, I will examine some of the tactics used by the Renewable Fuels Association to justify keeping the $6 billion ethanol subsidy that was made almost entirely redundant when the the Renewable Fuel Standard (RFS) was passed into law in  2005. Not satisfied with a market that is mandated by law to grow by 25%...[read more]

Following my recent essay on the elimination of the VEETC, the major ethanol subsidy in the U.S., some ethanol supporters argued for continuing the subsidies because oil companies receive subsidies. There are many versions of the oil subsidy argument – some of them grossly in error – but I won’t argue about what is and is not an oil...[read more]

Ulterior Motives Behind the Ethanol Pipeline? Ethanol producers in the Midwest have lobbied for support to build a pipeline to ship their ethanol to the East Coast. As I have argued, given that the market for ethanol is nowhere close to being saturated in the Midwest (a large E85 market in the Midwest could consume all of the ethanol...[read more]

The Ethanol Rhetoric Ramps Up It has been interesting to watch the flurry of ethanol rhetoric since the recent elections. With the $0.45 per gallon subsidy (called the VEETC) and the ethanol tariffs both set to expire at the end of next month, both sides feel that there is a lot at stake, and they have really ramped up the rhetoric. One...[read more]