...Other economists say the industry's federal subsidies are far higher. They average about $39 billion annually if items such as defense of oil lanes in the Persian Gulf, guarding domestic infrastructure like the Alaska Pipeline, and paying to maintain the nation's Strategic Petroleum Reserve are also included, says Doug Koplow, founder of Earth Track, a Boston consulting firm that analyzes natural-resource subsidies.
..."Cutting oil consumption in any significant manner means increased reliance on ethanol and other biofuels because they are easily the most cost-competitive alternative to gasoline on the market. Accordingly, it's worth noting that the president's own Department of Agriculture reports that ethanol costs about $2.53 per gallon to produce - even with the subsidies. Without them, economist Doug Koplow calculates that production costs would be at least $1 per gallon higher.
Profile and responses to questions from Grist staff; article is part of Grist's Interactivist column focusing on people working in innovative ways to address environmental challenges.
Detailed overview of the ecological challenges of biofuels, and includes discussion of subsidies as well, referencing Earth Track's 2006 review for the IISD.
...More corn for ethanol producers, of course, means less for livestock. Ranchers in wide-open Western states and pig farmers in the rural stretches of the South and Midwest are finding their businesses slammed by policies cooked up in Washington.
Hitch says the feedstock that's primarily made from corn is the single biggest expense for his business. As corn costs have doubled, meat packers and processors like Tyson Foods (TSN) and Smithfield Foods (SFD) have to pay more for the animals they buy.
References Earth Track's detailed 2006 review of US biofuel subsidies published by the IISD:
A general introduction to the issue of oil subsidies, and how reforms could benefit ethanol. It references Earth Track's work (extract below), thought makes only a passing mention of our detailed work on ethanol subsidies though released just a year prior to this article.
Mentions biofuels subsidy study done for IISD's Global Subsidies Initiative:
"But corn-based ethanol, the sort produced in America, is neither cheap nor green. It requires almost as much energy to produce (more, say some studies) as it releases when it is burned. And the subsidies on it cost taxpayers, according to the International Institute for Sustainable Development, somewhere between $5.5 billion and $7.3 billion a year."
Article cites subsidy value per gallon of ethanol from our October 2006 study for IISD.