Senate Votes to End Billions in Ethanol Subsidies


Photo credit: Phil Roeder via Flickr/CC BY

A measure that would remove roughly $6 billion in annual ethanol subsidies just passed the U.S. Senate, signaling, among other things, a shift in public attitude towards the once-heralded alternative fuel. It wasn't so long ago that corn ethanol was considered a plausible replacement for oil -- but that was before further scientific inquiry revealed it to be nearly as environmentally damaging as black gold. Today, the Senate has cleared the way towards ending the ethanol industry's generous federal funding.Reuters reports:

The Senate voted 73 to 27 on Thursday to wipeout billions of dollars in support for the U.S. ethanol industry. The Senate approved an amendment to end the 45-cent-a-gallon subsidy the government gives refiners and the 54-cent-per-gallon tariff on imported ethanol from Brazil and other countries.

The ethanol subsidy amendment on Thursday from Democratic Senator Dianne Feinstein and Coburn will be tacked on to an underlying economic development bill, which faces a difficult time passing the Senate.

Funny how the GOP is okay with cutting subsidies for ethanol, but if anyone proposes cutting subsidies for oil, it's suddenly "raising taxes". Just a few months ago, Democrats wanted to cut roughly the same amount -- $6 billion -- from annual oil subsidies, but were met with unified, ironclad opposition. It rather explicitly reveals how 'flexible' the GOP's ideology can be when those on the receiving end of federal handouts are some of their biggest corporate donors.

Regardless, dropping ethanol subsidies is probably a smart idea -- corn ethanol is a huge water and energy suck, some speculate its production has led to food shortages, and is generally far from the fuel of the future it was once hoped to be. Cellulosic ethanol is more promising, and some argue that keeping the subsidies around will help usher in breakthroughs in that fuel source. But dropping the subsidy makes Brazil's cane sugar ethanol more viable on the market -- and that is a more environmentally sound fuel.

All in all, dropping the subsidies is probably a net gain for the environment -- but it'd be nice if the GOP's ideology was consistent enough to help abolish some of the far more pernicious subsidies we keep on the books.

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Tags: Congress | Ethanol | Oil | United States