End of Biofuels 'Money Train' In Sight?

By PHILIP BRASHER
Des Moines Register Washington Bureau

Few industries are more dependent on government subsidies and mandates than biofuels producers, and no state has benefited more than Iowa.

The industry wants billions of dollars in additional subsidies, both to build a national distribution system for ethanol and to underwrite the production of ethanol from new feedstocks such as crop residue, wood chips and other sources of plant cellulose. One of the first cellulosic ethanol plants is planned for Emmetsburg.

"We're creating a new energy infrastructure that we haven't had in over 100 years," said Brent Erickson, an executive vice president of the Biotechnology Industry Organization.

But the tight federal budget makes it challenging for lawmakers to continue existing subsidies, let alone enact new ones.

The 51-cent-a-gallon ethanol subsidy alone will cost taxpayers $6.4 billion a year when the distilleries now under construction around the country are completed in coming months, pushing annual production to 12.6 billion gallons. Congress is considering legislation that could triple production by 2022.

Des Moines Register, July 15, 2007