Senate Votes to End Ethanol Subsidy

[jake75]

Here is the article: "Faced with escalating government red ink, the Senate voted Thursday to repeal tax credits worth about $6 billion annually for producing ethanol, a liquid fuel additive that comes mostly from U.S.-grown corn.With a 73-27 vote, the Senate passed an amendment to end on July 1 the 45-cent-a-gallon subsidy the government gives oil companies for blending ethanol into gasoline and the 54-cent-per-gallon tariff it places on imported ethanol to protect the domestic market. Its vote comes just two days after it rejected a similar effort."Now, I am not sure what this means. If the oil companies are still required to use 10% ethanol in gasoline it just means that 10 gallons of fuel (9 gal gasoline + 1 gal ethanol) will cost 45 cents more - that's a 4.5 cent a gallon increase. Right now that 4.5 cents a gallon is being picked up by Uncle Sam, adding to our grandchildren's debt..I am o.k. with that.If it means that ethanol no longer can compete in price with gasoline and the oil companies go back to selling a 100% gasoline fuel, I am really o.k. with that as we get 3.35% more mpg at the same cost. Of course gasoline demand will rise 10% and that could cause an increase in g gasoline prices that will negate any savings. The truth is probably somewhere in the middle. Gasoline will rise 2.3 cents (less than 1% based on $3.59/gal gas) and we will get 3.35% more mpg. That translates to a 9 cent per gallon savings by my calculation. In addition, our food costs will be lower as there will then be less demand for corn etc. Corn is a major feed cost affecting the prices of meat, milk, eggs etc.Who loses if there is no mandatory ethanol content in gasoline? Grain farmers. If no action is taken under current law the subsidy will end as scheduled 12-31-11.

[jimincalif]

The sooner it ends the better, IMO. It is driving up food prices, the energy it takes to grown the grains and make the ethanol exceeds its energy content. It wreaks havoc with older fuel systems, it destroys fiberglass fuel tanks in boats, etc.

[star_deceiver]

Farmers might now have to compete with the biomass industry! If they sold non-ethanol gas right beside the 10% stuff, that would be great!

[GMJAP]

[jake75]

Unfortunately a news article I read this morning says that the requirement to blend ethanol with gasoline remains. Sort of like the govt. forcing us to buy cfl light bulbs by banning the sale of large wattage tungsten bulbs. Still, I favor elimination of the ethanol subsidy. I also favor an increase in the gas tax IF that money were used to improve our highway system.And this . "the New York Times notes that the vote was attached to a stalled economic development bill and so may never actually become law. In addition, as the Christian Science Monitor reports, “the Obama administration has said it would veto any attempt to cut subsidies for ethanol producers entirely.”

[CAMOGIRL]

Quote, originally posted by star_deceiver »If they sold non-ethanol gas right beside the 10% stuff, that would be great!Thats the way we do out here. Anything labeled PLUS that is cheaper than regular is e10. Our pumps aren't labeled here at my station, but many are. Thee only downside I see here is that in our poor rural area, the ethanol plants provide much-needed jobs. If they go under, so does our economy.. even further. Not sure how long it would take before ethanol becomes a blast from the past.