76% of Federal Renewable Energy Support Went to Ethanol in 2007
by Matthew McDermott, New York, NY 
on 01.12.09
image: EWG
Considering that the incoming Obama administration’s energy policy looks to favor second generation biofuels, wind, solar and geothermal power to a greater degree than previous policy, these statistics cited by the Environmental Working Group as much a reminder of things past as much as a warning on how not to do things in the future. Nonetheless, it is useful to, as the EWG puts it, “take a hard, clear-eyed look at...corn-based ethanol’s stranglehold on federal renewable energy tax credits and subsidies. This how things looked in 2007:
Ethanol Got $3 Billion in 2007
According to data EWG dragged up from EIA information released in April of 2008, in 2007 the ethanol industry received $3 billion in federal tax credits, which biodiesel received $180 million, and solar, wind and geothermal combined received $750 million. For those keen on percentages, that’s 76% for ethanol and 19% for solar, wind and geothermal.
America Can Do Better
Saying that “America can do better” and citing oft-heard reasons for corn-based ethanol not being all it was once claimed to be (limited potential for offsetting meaningful amounts of fossil fuels, dubious carbon emission reduction claims), the EWG is calling for politicians to 1) “phase out tax credits for corn ethanol and subsidize biofuels only if they show clear promise to meet strict climate and environmental protection standards;” and 2) “rebalance the US renewable energy and energy conservation portfolio to favor options that do the most to reduce fossil fuel use, safeguard the environment, spur more widely-shared economic development and increase energy security.”
While I'm right there with EWG in thinking that the US would do well to put corn ethanol behind it, move forward to better sources of renewable energy and concentrate even more on energy conservation, and stop being so beholden to Big Corn in general—so right on for the EWG in what they are advocating—is anyone else a bit tired of all the recommendations for what Barack Obama should or should not do? Let's all give the man until February 1 to get innaugurated and settle in to his new abode before again telling him what he ought to be doing.
More: Environmental Working Group
Corn Ethanol, US Energy Subsidies
40 Corn Ethanol Plants Could File for Bankruptcy by Early 2009
Corn Ethanol is Stupid: 13 Year Old Weighs In On Renewable Energy
Graphic of the Day: US Federal Energy Subsidies and Support, Fiscal Year 2007
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What about Jeff Broin's response to the subsidy controversy?
"In 2007, the tax incentive, that tax break, was $3.3 billion, but the ethanol industry returned $4.6 billion in tax revenue to the Treasury," Broin says. "We saved $8 billion in farm payments because we eliminated farm payments for the first time in almost 40 years. We saved the consumer $40 to $60 billion in gas prices with extra supplies that kept prices down. We added $47 billion to the (Gross Domestic Product)."
Take all the time you need to rebut.
$3 Billion, yeah, that's what the farm lobby gets for you.
The EWG numbers are a little misleading. Federal renewable energy support increases as the supply of the energy source grows. In the case of ethanol, it grew a lot faster than wind or solar, so it receives more federal support in total dollar figures.
However, if you look at it from a federal dollar per btu output, ethanol has been the better investment: http://biofuelsdigest.com/blog2/2009/01/06/putting-ethanol-and-solar-subsidies-in-perspective/
For a little perspective a person really needs to review the data from the EIA which they referenced but didn't link to. The EWG just gave the information that they wanted you to see.
http://www.eia.doe.gov/oiaf/servicerpt/subsidy2/index.html
Reading from the executive summary.
Total Federal energy-specific subsidies and support to all forms of energy are estimated at $16.6 billion for fiscal year (FY) 2007
Subsidies and support related to electricity production are estimated at $6.7 billion (Table ES3), or about 41 percent of total energy subsidies.
Of that 1.008 billion went to renewable electricity production (which included wind, solar, and geothermal) and about 3 billion went to coal and refined coal (synthetic fuels derived from coal).
Non-fuel specific subsidies totaling $3.6 billion focus on energy efficiency, conservation, and energy-related financial assistance to residential, commercial, and industrial end users.
what about the effect on food sources. farmers have dedicated more land to producing more crops for ethanol production which has driven the price of food crops higher. the US investment in ethanol may be better right now but crops are not as productive as algae.
http://digg.com/business_finance/American_Hemp_Start_Up_Program#
Take a look at how HEMP can change the game.
The interesting thing about the subsidies, not much of it goes to the ethanol industry. Most of the subsidy goes to the blender or refiner. Most of the ethanol producers out there, a hundred plus companies that produce ethanol don't get a dime from the government for producing ethanol.
If have been to some of these ethanol plants, which are dotted all over the Midwest, you see they support local economies, hiring local people. They also support farms and farm co-ops. Yes, they also support big agri-business, but name one industry that is not big these days. In the last couple of years, I have seen local economies pick up in these areas, isn't that better the alternative.
If you want a liquid fuel for cars, what is the alternative? Cellulosic ethanol will take 2-5 more years to become econmically feasible. Biodiesel requires crops not grown in the US. For corn based ethanol, it is technology that exists today, and is also getting more efficient. It is great to look forwards, but you still need to get there from here.