For the first time in nearly a decade, the ethanol industry will exist without any government financial support: the blenders' tax credit, created by Congress in 2004 to establish a healthy ethanol industry, expired on December 31, 2011.
The fact that the ethanol tax credit expired without fanfare or a fight came as no surprise. Ethanol producers and advocates have been saying with certainty that the industry can and will survive without it. But what would happen to the United States without ethanol as a fuel choice?
Let's go back in time to the origins of ethanol in America. Ethanol was at the birth of the American automotive industry, when Henry Ford designed his first cars to run on both gasoline and Midwest-made ethanol.
But in the 1920's, John D. Rockefeller, founder of Standard Oil, helped deliver a crippling blow to his competitor in the fuel market by funding political support for Prohibition, which banned distillation of alcohol fuels as well as consumable spirits. That was followed by a campaign in the late 1930s to displace ethanol's use as an anti-knock fuel ingredient with lead - one of the deadliest toxins known to man.
Then came the 1970s, and the first oil shock to our economy when OPEC flexed its muscle over the U.S. economy by dialing back oil production -- creating gas lines, rationing and the start of a policy that would require us to create a permanent military presence in the Middle East, at great cost to the U.S. military and to taxpayers. In response to OPEC's manipulation of oil production to drive up costs, President Jimmy Carter set a new fuel standard of 10 percent ethanol blended into gasoline as a means of breaking the strategic hold that imported oil has over our economy.
Later, Congress adopted the Volumetric Ethanol Excise Tax Credit -- the so-called "blender's tax credit." This was used as an incentive for fuel blenders to blend ethanol into gasoline. Read that carefully: the oh-so-hated ethanol "subsidy" was actually a tax credit, and only went to fuel blenders -- never to ethanol producers, never to corn farmers. With the blender's tax credit, the use of ethanol significantly expanded to the point where we are producing more than 13 billion gallons of ethanol annually. That is enough to meet the goal of a 10 percent blend in every gallon of gasoline sold in America.
But without those 13 billion gallons of ethanol, motorists in the U.S. are all part of a captive market that is controlled by Big Oil. The alternative to ethanol is gasoline, nearly two-thirds of which is derived from foreign oil. We've spent trillions of dollars importing oil, funding corruption, political adversaries and outright enemies. We have deployed to four conflicts, fought three wars, lost more than 6,000 soldiers, spent trillions of dollars, and created a whole new class of wounded warriors, thousands of whom will need long-term care funded by our government.
Besides economic costs and taxpayers cost, gasoline brings a cost to public health. Ethanol is our nation's most-effective smog-reduction tool. Most people in the country don't know anything of the dozens of hydrocarbon compounds that go into making gasoline -- and how toxic that exhaust actually is because of those carcinogens. Without ethanol, we would be adding even more harmful emissions to the air we breathe. Former U.S. Diplomat and White House Counsel C. Boyden Gray, wrote in his Ethanol Across America White Paper, that increased use of ethanol reduces the toxic aromatics and other pollutants -- like benzene, toluene and xylene -- used in gasoline.
Ethanol displaces the equivalent of 500,000 barrels per day of gasoline derived from foreign oil and expands our domestic fuel supply. More gasoline can be refined from a barrel of oil if ethanol is used to increase the octane level.
Ethanol is not just another fuel choice; it is a choice for a stronger America. Domestic ethanol is the single-best alternative we have that reduces our dependence on foreign oil, improves our environment, creates jobs that cannot be outsourced and saves America money and human lives. Unquestionably, America is better off with ethanol -- and by blending more ethanol into our fuel supply, our economic security, national security and all of our lives will all be made better.
Gen. Wesley K. Clark, former NATO Supreme Commander, is the Co-Chairman of Growth Energy, an organization of ethanol supporters representing more than 75 producing plants, 50 associate businesses and more than 25,000 individual members. The organization was formed in November 2008.
Follow Gen. Wesley Clark on Twitter: www.twitter.com/GeneralClark
You should all have a small to midsize plant of your own. It doesn't scale well for giant plants which is why most of them have been failing. That, and they were using Corn which again is stupid. Cellulose is not perfected yet, still takes too much energy & water to break it down. If we just grew Sweet Sorghum & Buffalo Gourds in this country, we could put so many people back to work!
I see that he is pro-ethanol. But consumption of ethanol can be encouraged by legislation, market forces (gasoline more expensive than ethanol) or other means, that render the ethanol tax credit no longer effective.
So what's his point about the ethanol tax credit?
Corn is so high in suger it makes a ton of juice per bushel.
Cellulosic is the long term way to go for ethanol, seed oil and algae based for oily fuel.
While i disagree on this issue, I was a strong supporter of your 2004 presidential bid. Please continue to run for public office!
Read the new clip you posted. It does not say we are a net exporter of fuels, though we do expoet ethanol.
To put this into perspective, if all the cars on the road were equipped with this engine (MIT Ethanol Enabled Direct Injection Engine http://www.ethanolboost.com/ ), we would achieve a 28% reduction in gasoline consumption with a supply of ethanol equalling 5% of the total fuel supply. If we were producing a supply of ethanol equalling 15% of the fuel supply, this would result in a 38% reduction in gasoline consumption. A 28% reduction in gasoline consumption would have a very salutary effect on rising gasoline/oil prices. A 38% reduction in gasoline consumption would have a significantly greater impact on rising gasoline/oil prices.
We should also supplement our supply of ethanol by producing methanol from natural gas (at about $1.50 a gallon) so as to more rapidly reduce our gasoline/oil consumption. Perhaps in taking these steps we can save our economy from relentlessly rising oil prices .
The inevitability of rising oil/gasoline prices is now being given a significant boost by the Arab Spring and Iran's designs on nuclear weaponry. Neither of these developments will be going away soon. Just as increasing demand for oil from China, India and developing nations around the world will continue to pressure oil prices relentlessly higher.
This not only decreases our energy security but also will seriously impact our economic growth. People seem to think we can wait twenty years for electric cars to have an appreciable impact on our oil consumption. Alas, we do NOT have twenty years to save our economy from rising oil prices.
Ethanol, combined with the adoption of the MIT designed ethanol enabled Direct Injection engine which achieves 30% BETTER fuel economy while using 5% ethanol at a cost of $1,000 to $1,500 (see: Ethanol Boosting Systems http://www.ethanolboost.com/Technology%20and%20applications.htm ) could be a powerful tool to reduce gasoline consumption in the U.S. and help to restrain the rise in the price of oil while increasing our energy security. At $1,000 to $1,500 marginal cost this technology would be far more readily (and rapidly) adopted than hybrid & plug-in electric cars costing 4 to 13 times as much.
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It's past time to make a major transition to renewable energies. Government has to lead that, because only it is big enough to stand up to the power of Big Oil...if We the People make it.
"Ethanol is not just another fuel choice; it is a choice for a stronger America. Domestic ethanol is the single-best alternative we have that reduces our dependence on foreign oil, improves our environment, creates jobs that cannot be outsourced and saves America money and human lives. Unquestionably, America is better off with ethanol -- and by blending more ethanol into our fuel supply, our economic security, national security and all of our lives will all be made better."
Gen. Wesley K. Clark
Keep electing R,conservatives and especially baggers and keep getting screwed.
We as a nation must and should continue to support anything that creates jobs, decreases our dependency on foriegn oil and helps our environment. The fight is not with the people, the fight is with our republicans member of congress, that continue to protect the billion dollar oil industries. Hell we still give them a credit for producing oil.