Ethanol’s Broken Promise: Using Less Corn Ethanol Reduces Greenhouse Gas Emissions

It is now clear that the federal corn ethanol mandate has driven up food prices, strained agricultural markets, increased competition for arable land and promoted conversion of uncultivated land to grow crops. In addition, previous estimates have dramatically  underestimated corn ethanol's greenhouse gas emissions by failing to account for changes in land use.

Subsidized biofuels and energy security in a time of crop failures

It's an interesting time to watch biofuels markets.  A couple of years ago, with commodity prices spiraling, there was great concern that fuel markets were outbidding food and feed markets for edible biomass.  Now, reporter Judy Keen notes that the United States is facing drought in nearly 80 percent of the country's corn-growing area; and more of the country's landmass is facing drought than any time since 1956.

Crying Wolf on VEETC

In the area of fixed income, one shouldn't be betting against Bill Gross of Pimco.  The man is a walking, talking fixed income encyclopedia and routinely makes astute calls on bond trends and pressures.  In March his total return fund (PTTRX) went to zero on US Treasuries.  In April, he supposedly went short (update here). 

Biofuels trade press acknowledges excise tax credits duplicate renewable fuel standards

During the early part of 2010, when the volumetric ethanol excise tax exemption (VEETC) looked like it was heading towards elimination, ethanol industry contortionist Bob Dinneen of the Renewable Fuels Association worked hard to paint the subsidy as vital to all things American.  In yet another RFA-sponsored study by the industry's favored economist John Urbanchuk, RFA set out to quantify the bad things that would happen if VEETC expired.  They came up with quite a list, summarized by

Subsidies to ethanol and nukes move forward due to Congressional spine malfunction

Spineless subsidies part 1:  Ethanol

Ethanol blenders credit moves forward towards extension at current rates in the Senate.  Even more ludicrous since even without the excise tax credit subsidy we are still forced to buy the stuff at above market prices under the federal Renewable Fuel Standard.

Chuck Grassley makes a good point when he argues that you can't treat ethanol and oil subsidies differently:

Using Biofuel Tax Credits to Achieve Energy and Environmental Policy Goals

The federal government supports the use of biofuels—transportation fuel produced usually from renewable plant matter, such as corn—in the pursuit of national energy, environmental, and agricultural policy goals. Tax credits encourage the production and sale of biofuels in the United States, while federal mandates specify minimum amounts and types of biofuel usage each year through 2022. Tax credits effectively lower the private costs of producing biofuels relative to the costs of producing their substitutes, gasoline and diesel fuel.

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