Ethanol Thirty years of subsidies have not made food for fuel competitive or useful. World population increases by seventy million annually, but there is no increase in arable land. Now hundreds of millions of personal cars and trucks have a seat at the dinner table by consuming biofuels made from the fruit of the plant. Sens. Charles Grassley, R-Iowa, and Kent Conrad, D-N.D., recently introduced an alternative, the Domestic Energy Promotion Act of 2011. Their version would, through 2016, ratchet down the tax credit and extend the alternative fuel refueling property credit; the cellulosic producers' tax credit; and the special depreciation allowance for cellulosic biofuel plant property.
The bill would reduce the subsidy to 20 cents next year and to 15 cents in 2013. After that, there would be a variable subsidy to protect the industry against a collapse in oil prices. As the price of crude falls, ethanol loses its competitive edgeThe ethanol subsidy and tariff is bad economic policy, bad energy policy and bad environmental policy," Coburn said at the time his bill was introduced. "As our nation faces a crushing debt burden, rising gas prices and the prospect of serious inflation, continuing our parochial ethanol policy that increases the cost of energy and food is irresponsible.
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