Posts tagged “VEETC”
For those of you who missed it, the corn ethanol lobby failed to convince Congress to extend the ethanol import tariff (54 cents/gallon) as well as the blenders tax credit (46 cents/gallon), which were slated to expire at the end of 2011 …sound of crickets chirping.
My guess is that because we exported almost 9% of our ethanol production last year, it was hard to argue that we still needed a tariff to protect us from Brazilian ethanol imports, especially since Brazil was our biggest customer. In a related vein, it should also be hard to argue that we mandate ethanol use to reduce oil imports while exporting ethanol to Canada (second largest customer and largest oil importer) as well as the United Arab Emirates (our fifth largest customer).
As for the tax credit, well, paying oil companies to blend something they were already legally mandated to blend never did make much sense, except maybe to the oil companies who were not about to look that gift horse in the mouth.
Here are my choices for the Top 10 energy related stories of 2011. Don’t get too hung up on the relative rankings. They are mostly in no particular order, although I think the top story is pretty obvious. 1. The Fukushima Daiichi nuclear disaster On March 11, 2011 the tsunami that flooded Japan’s Fukushima Daiichi nuclear plant resulted in the worst nuclear crisis since Chernobyl. The tragedy spurred heated debates over whether nuclear power could ever be totally risk-free. Several countries decided that the potential consequences were just too great, and reversed their plans for new nuclear plants and in some cases shuttered existing plants. The incident will likely slow the global development of nuclear power for years, just as… Continue»
Last November, the Financial Times published an article charging that ethanol from the U.S. is collecting U.S. tax credits before being shipped to Europe, where it also qualifies for favorable tax treatment. I wrote an article about this called Taxpayer Subsidized Ethanol Exports May Bite Industry in the Future. The gist of my article was that if this charge is true, it completely undermines the supposed reasons U.S. taxpayers are subsidizing ethanol in the first place — to reduce dependence on foreign oil. In fact, as I showed in a later article, any ethanol that is exported actually increases our dependence on foreign oil because it takes some oil to make the ethanol and then ship it to the export… Continue»
This week the Environmental Protection Agency (EPA) approved the use of 15% ethanol fuel blends (E15) for 2001-2006 model year cars: EPA Grants E15 Fuel Waiver for Model Years 2001 – 2006 Cars and Light Trucks WASHINGTON – The U.S. Environmental Protection Agency (EPA) today waived a limitation on selling gasoline that contains more than 10 percent ethanol for model year (MY) 2001 through 2006 passenger vehicles, including cars, SUVs, and light pickup trucks. The waiver applies to fuel that contains up to 15 percent ethanol – known as E15. EPA Administrator Lisa P. Jackson made the decision after a review of the Department of Energy’s thorough testing and other available data on E15’s effect on emissions from MY 2001… Continue»
In Part I we saw that the Renewable Fuels Association (RFA) pays for shoddy studies and then cites them to fear-monger into getting more tax dollars. Hypocritically, when they are challenged with a critical point on ethanol, they attempt to cast doubt by questioning the source of funding from the challenger (as shown here). Here in Part II, I will show that the RFA is guilty of misrepresentation so blatant that it can only be called dishonesty. Perhaps the biggest irony in all of this is that our tax dollars via the ethanol subsidies keep groups like the RFA in business. The circle goes like this: Tax dollars and mandates create and support an ethanol industry. Some of the money… Continue»
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% between now and 2015, the ethanol lobby insists that they need the subsidies as well. As I will show, they have no qualms about deceiving people to get their way. In this post, I will cover a tactic that the RFA has previously condemned in others: Paying for self-serving research. I will also show that the amount of taxpayer money they… Continue»
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 produced there), it would seem to be a better allocation of resources to build up the E85 market rather than try to export ethanol from the Midwest. However, some have claimed that the real reason ethanol producers want the pipeline is so they can export ethanol out of the country. They argued that U.S. taxpayers would end up subsidizing ethanol exports… Continue»
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 side will claim that ethanol is the greatest thing since sliced bread, then the other side claims it is an environmental disaster. Around and around the claims go. Misinformation abounds. Mortgaging the Future I am not going to argue in this essay that U.S. ethanol policy is good or bad, but I am going to argue that extending… Continue»
Bob Dinneen wants Congress to extend ethanol tax credits with “a stroke of the pen, a little bit of Whiteout, just change the date.”
Rumors are swirling that the White House may announce support (subscrip req’d) for some sort of change to the main corn ethanol tax credit. In preparation for meeting with the White House, the major corn ethanol associations–RFA, Growth, NCGA, ACE–apparently swallowed their difference long enough to agree on a one-page platform best described in this OPIS article. Much of this is radioactive, terrible biofuels policy: having Congress try to legislate away the science of lifecycle carbon emissions or allowing corn ethanol to qualify as an advanced biofuels under the RFSII or even extending the VEETC at current levels for a year (which would waste ~$6 billion dollars and mostly support fuels that produce more carbon pollution than gasoline). Especially the… Continue»