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Joel Velasco

Joel Velasco

Posted: December 1, 2010 03:40 PM

News last week that leading conservative Senators Tom Coburn (R-OK) and Jim DeMint (R-SC) joined former Vice President Al Gore in calling for ethanol policy reform sent ripples through the renewable energy world, which is closely eyeing the lame-duck session to see if Congress will extend the costly ethanol subsidies and trade protection, or let them expire as scheduled on December 31st.

Today’s release of a bipartisan Dear Colleague letter from Senators Dianne Feinstein (D-CA) and Jon Kyl (R-AZ) brought even greater evidence that ending the ethanol tariff and subsidies is “something we can all agree on.” The letter, signed by 17 Democrats and Republicans from across the country, calls for an end to policies that are “fiscally irresponsible and environmentally unwise,” and says “The tariff on ethanol makes our country more dependent on foreign oil... Eliminating or reducing the ethanol tariff would diversify our fuel supply, replace oil imports from OPEC countries with ethanol from our allies, and expand our trade relationships with democratic states.”

Here’s the list of signatories:

1. Dianne Feinstein (D-CA)
2. Jon Kyl (R-AZ)
3. Robert Bennett (R-UT)
4. Barbara Boxer (D-CA)
5. Richard Burr (R-NC)
6. Benjamin Cardin (D-MD)
7. Tom Coburn (R-OK)
8. Chris Coons (D-DE)
9. Susan Collins (R-ME)
10. Bob Corker (R-TN)
11. Michael Enzi (R-WY)
12. John McCain (R-AZ)
13. Jack Reed (D-RI)
14. Jeanne Shaheen (D-NH)
15. Mark Warner (D-VA)
16. Jim Webb (D-VA)
17. Sheldon Whitehouse (D-RI)

Members of Congress aren’t the only ones pushing for an end to the ethanol tariff and subsidies. Yesterday, an extremely broad and diverse coalition of nearly 60 groups sent a letter to Congressional leadership urging that they no longer “continue subsidizing gasoline refiners for something that they are already required to do by the Renewable Fuels Standard...”Among the signatories were business associations, hunger and development organizations, taxpayer advocates, agricultural groups, religious organizations, environmental groups, budget hawks and public interest organizations. The letter was home to many strange bedfellows that even included the liberal lightning rod MoveOn.org and tea party originators FreedomWorks -- surely this must be a first!

Despite this overwhelming support from almost every nook and cranny, the corn ethanol industry is still pinning its hopes on a tax package that could move before the lame duck concludes. It’s hard to imagine what more it could take to end this boondoggle once and for all. Congress has every reason and then some to make the right decision -- from editorials in over 60 newspapers to over 80,000 letters from clean energy advocates across the country. When the clock runs out, Americans will hopefully enjoy the economic, environmental and energy security benefits of sugarcane ethanol at last.

 

Follow Joel Velasco on Twitter: www.twitter.com/caneethanol

News last week that leading conservative Senators Tom Coburn (R-OK) and Jim DeMint (R-SC) joined former Vice President Al Gore in calling for ethanol policy reform sent ripples through the renewable e...
News last week that leading conservative Senators Tom Coburn (R-OK) and Jim DeMint (R-SC) joined former Vice President Al Gore in calling for ethanol policy reform sent ripples through the renewable e...
 
 
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12:42 PM on 12/04/2010
part 2 .... would have on local gas prices. He said that generally speaking they do not yet have enough productive capacity to have too much of an impact yet but as they continue to cut down more forests and brush they will and yes at that point cane ethanol will make a big dent in the US and probably shut down a bunch of old facilites causing layoffs.
Regarding waste for fuels he said that companies like Novozymes who make the most enzymes for ethanol production in the U.S. have developed second gen enzymes that reduce the cost dramatical­ly of waste biofuels but that they only committed to spending the R&D dollars to produce the enzymes because of the committmen­t of the US to biofuels, the risk is if you reduce that committmen­t, those R&D dollars disappear and capital will flow instead to more cane production meaning more forests being cut down and more money leaving our shores and less employment­.

So from my friends perspectiv­e, given the innovation­, given the employment­, and given the dollars kept in the US, he would talk great offense to your disaster comment and he has forgotten more about ethanol than you will ever know. Food, so to speak, for thought.
12:42 PM on 12/04/2010
So I had a chance to talk with a friend of mine on this very topic who works in the ethanol industry and he sent me his thoughts which I paraphrase below. He said that basically if you got rid of the tax credit and the tariff not much would change because the fact is ethanol producers are making money and the cost is actually BELOW the cost of gasoline thanks to high oil prices. The implicatio­n is ethanol is actually making our gas more affordable at the moment. He also said you can think historical support of the industry that has driven innovation to reduce energy consumptio­n process, reduce water and other costs overall. Without the support these wouldn't have happened. He said most of the opposition uses outdated models and that when you plop a new "wet" mill, fully integrated with a feed lot in the middle of an area that can produce 200+ bushels of corn yields the value propositio­n is meaningful especially going forward as oil prices rise due to rising costs in the gulf of mexico. Regarding cane ethanol, he concedes it is more efficient but its immediate impact in the U.S. would be small given rising competitiv­eness of corn based ethanol and the fact they are not exactly long sugar in Brazil right now which is clear given the price of sugar. Plus, the Brazilian government may be a bit concerned what a bunch of automotive fuel leaving its shores...
Genders
Love, Tolerance, Enlightenment
09:12 PM on 12/02/2010
Ethanol is a disaster. ONLY waste should be used for bio fuels. Bio Char can do it.
01:45 AM on 12/03/2010
Ethanol is a disaster huh? All those thousands of AMERICANS employed, all the money diverted away from middle east countries, all the research done to make it such that at current economics ethanol actually competes with 80 oil (do you think oil prices will fall?). Ya ethanol has been a disaster. Yet another know nothing city dweller providing a worthless opinion.
Genders
Love, Tolerance, Enlightenment
01:06 PM on 12/03/2010
Yes, corn ethanol is a disaster. It competes with food, cause food prices to go up, it energy negative or just barely positive, Only subsidies keep it going and tariffs on the much better Cane ethanol from south America. Bio Fuels should only be made from wastes. There is plenty, and it's using up dump land and polluting, so waste bio fuels is a double fine. Bio Char is also carbon negative.
06:59 PM on 12/02/2010
We just need to increase the US Sugar ethanol industry. We don't need Brazilian Sugar Ethanol. Energy Beets, Cane and Sweet sorghum all ...
06:58 PM on 12/02/2010
We just need to increase the US Sugar ethanol industry. We don't need Brazilian Sugar Ethanol. Energy Beets, Cane and Sweet sorghum all can be grown in the US.
06:15 PM on 12/02/2010
Current policies for US grown corn ethanol keep the proceeds for ethanol within the US. If tariffs were dropped and sugar cane based ethanol promoted, our ethanol supply would switch from the US to countries such as Brazil. Just what we need- govt. mandates for a set amount of ethanol combined with ethanol imported from foreign countries. Right, just ship more jobs overseas and increase the US trade deficit.
06:52 PM on 12/02/2010
It took 4 tries for me to say that same thing this morning.
09:41 AM on 12/02/2010
As a farmer I have a clear bias but I don't believe these politicians are doing this for any more altruistic reasons than the i-state politicians who support ethanol. Additionally, the subsidies for ethanol has resulted in more and more efficient enterprises and have resulted in significant research in things like cheaper enzymes that will put secondary sources on an economic footing.

The idea that "The tariff on ethanol makes our country more dependent on foreign oil..." deserves more debate that is for sure.
09:35 AM on 12/02/2010
Good idea. Billions invested in ethanol plants in USA, corn farmers getting a better price for their corn and spending the money here, by all means lets pull the rug out from under them and promote cane ethanol. Try growing sugar cane in the cornbelt and see where that gets you. Good old Huff post, working hard for hard working Americans.
01:17 AM on 12/02/2010
I'm trying to be positive because this is a positive story, but who is going to work in the sugarcane field? I can't believe farmers are going to make enough from selling sugarcane juice for ethanol to pay more than the unemployment insurance.
08:41 AM on 12/02/2010
Not to mention the fact sugar cane won't grow in most of this nation.
06:53 PM on 12/02/2010
But Sugar Beets make up 60% of our US supply. And they can be grown all over N. America, including Ak.
04:50 PM on 12/01/2010
Corn ethanol is the foundation and continuing evolution of the promising advanced biofuels market. It's much too early to pull the rug out from under corn ethanol. We must also address the biodiesel, cellulosic and algae tax credits in the lame duck session. The US market must protect itself from biased outside forces such as sugar from Brazil. Yet, there's room for imported sugar ethanol if UNICA would just cooperate and build consensus within the EPAs latest RFS mandate rather than perpetuate Big Oil & Food's myths. And please, start including Brazil's deforestation in your ILUC equation!