How truly amazing to see Democrats and Republicans in Congress finally doing something right by allowing the $6 billion annual tax subsidy for the corn ethanol industry to expire. Also ending is the heavy tariff that was aimed at keeping cheaper and more eco-friendly sugar-cane-based Brazilian ethanol out of the country.
Is it too much to ask that Congress also end its mandate forcing refiners to blend up to 15 billion gallons a year of the corn ethanol into gasoline, increasing to 36 billion by 2022? Probably, but the official end of the subsidies and tariff is at least a start.
This newspaper has long been critical of Congress' unquestioning support for corn ethanol. It takes almost as much energy to create the stuff as the energy it provides as a fuel. Backers also peddle it as a lower-carbon alternative to fossil fuels, but studies have shown that when all factors are taken into consideration, including clearing new land to replace crops lost to ethanol production, ethanol actually generates more greenhouse gas.
Ethanol also boosted food prices when farmers, benefitting from the heavily subsidized nature of the industry, determined they could make more money by replacing food crops with corn for ethanol.
So why did these subsidies dating back to 1978 survive? Liberal lawmakers backed the subsidies because of the undeserved pro-environmental reputation of the biofuel, while conservatives from the large farming states backed it to keep farmers happy. A remarkable shift led Congress to adjourn without again expending the subsidies. Many Democrats now dismiss the 45 cents per gallon tax credit for oil companies to blend ethanol into gasoline as needless corporate welfare and many conservative Republicans see it as needlessly contributing to the deficit.
But it only took inaction to let the subsidies expire at the end of 2011; it will take an affirmative vote to end the ethanol-blending mandate. Perhaps such political courage can be mustered after the November 2012 election.
While on the subject of subsidies, Congress should also end the numerous tax breaks the oil and natural gas industries receive, costing about $4 billion a year. President Obama has pushed to end those as well, but finds himself blocked by Republicans who raise false alarms about hurting fossil-fuel production. Big Oil doesn't need tax breaks to produce oil and make massive profits.
Congress should instead focus reasonable subsidies on encouraging the growth of emerging, renewable energy technologies, such as solar, wind power and geo-thermal heating. Those industries have great job-growth potential while helping the environment.
-- The Day of New London (Conn.), Jan. 12, 2012