Originally Posted by _cy_
just discovered this .. this is fucking insanity!!!
Deficit hawks, environmentalists, and food processors are celebrating the expiration of the ethanol tax credit. This corporate handout gave $0.45 to ethanol producers for every gallon they produced and cost taxpayers $6 billion in 2011. So why did the powerful corn ethanol lobby let it expire without an apparent fight? The answer lies in legislation known as the Renewable Fuel Standard (RFS), which creates government-guaranteed demand that keeps corn prices high and generates massive farm profits.
Removing the tax credit but keeping the RFS is like scraping a little frosting from the ethanol-boondoggle cake.
The RFS mandates that at least 37 percent of the 2011-12 corn crop be converted to ethanol and blended with the gasoline that powers our cars…[As a result] the current price of corn on the Chicago Mercantile Exchange is about $6.50 per bushel—almost triple the pre-mandate level.
Wrong again. The VEETC (Volumetric Ethanol Excise Tax Credit) provided a $0.45 tax credit for each gallon of ethanol used by the blender
. The blenders are the gasoline distribution companies (big oil). My company, as a small producer (50mmgpy), did benefit from a subsidy that has long since expired. We also used to collect a few hundred k$ for the E85 that we blended (with straight run, or natural gasoline) and sold direct to stations that sell E85. The blenders, as soon as the VEETC expired, simply raised the price of gas, passing the bill to the consumer.
It all boils down to whether or not you believe that we should be trying to use a renewable source for a portion of our motor fuel. Ethanol is the only viable alternative at this point. It has its drawbacks, especially when derived from corn starch. Bio-butanol(sp?) would probably be a better alternative for blending with gasoline but the yeast & enzymes for conversion aren't ready yet (commercial plants just starting to scale up), same with cellulosic.