Subsidies for corn ethanol
| More ethanol subsidy info from the heart of ethanol country. June 2, 2009 |
Corn ethanol subsidies totaled $7.0 billion in 2006 for 4.9 billion gallons of ethanol. That's $1.45 per gallon of ethanol (and $2.21 per gal of gas replaced).
Even with high gas prices in 2006, producing a gallon of ethanol cost 38¢ more than making gasoline with the same energy, so ethanol did need part of that subsidy. But what about the other $1.12. Not needed! So all of that became, $5.4 billion windfall of profits paid to real farmers, corporate farmers, and ethanol makers like multinational ADM. Why is it the farm states put up with this?!
Where did those subsidies come from:
1. 51¢ per gallon federal blenders credit for $2.5 billion = your tax dollars.
2. $0.9 billion in corn subsidies for ethanol corn = your tax dollars.
3. $3.6 billion extra paid at the pump.
That's quite a bit when you figure it only made us 1.1% more energy independent and only reduced US greenhouse gases by 1/19 of 1%.
Complete analysis of corn-ethanol subsidies:
Direct Subsidies ♦ Price premiums ♦ Social cost & windfall profits
| Who should get the subsidy? |
In 2006 ethanol blenders were handed $2,500 million in subsidies while the Department of Energy awarded $385 million spread over four to six years to help build cellulose ethanol plants. That's about 32 times less per year. But celluse gets a bit of subsidy from the USDA. Altogether it may get 10% as much as corn-ethanol. The problem is the lobby for cellulose is much weaker than the corn-ethanol lobby.
Corn ethanol does not need subsidies. Cellulose ethanol research does--it would actually do some good. But's what's needed is research, and very small-scale plants, not the big ones that are being built on pretense.
| Oil get's big subsidies, not ethanol. Wrong by 54 times! |
"Ethanol Today," (8/'05) states "Five years ago, a US General Accounting Office report showed that ethanol had received $11.6 billion in tax incentives since 1968, while the oil industry had received over $150 billion in tax benefit over the same period.
Probably true. But the oil industry produced 1068 times more energy so the subsidy rate per unit energy was 54 times higher for ethanol. That's like ethanol gets 54¢ and oil gets 1¢. Now if we had oil subsidies, and we do, and ADM is making more profit than.