John Urbanchuk

Natural gas fracking well in Louisiana

I should have linked to this last month, but better late than never.  Robert Rapier has done a nice review of the Renewable Fuel Association's rather exuberant claims on the impacts of killing VEETC. Given that the mandate still requires the use of almost all of the ethanol produced domestically, the mechanism of support may shift (from tax credits to transfers from consumers, as illustrated by rising prices on compliance credits under the renewable fuel standard) but the demand will remain.

Part I covers the problems with their jobs impact numbers and the work of John Urbanchuk, RFA's frequent researcher on these questions.  Rapier points out that in stark contrast to the more than 100,000 jobs Urbanchuk says will disappear with the demise of VEETC, another analysis, done for food manufacturers, estimated keeping VEETC in 2011 would save a whopping 296 jobs and at a cost of roughly $20 million each.   Part II covers the inaccurate comparisons RFA has made on subsidy support to oil versus ethanol.  Having done detailed work on subsidies to both of these fuels, I concur with Rapier that RFA simplifies and skews the comparison.