Obama to Back Ailing Ethanol Makers, Follow Failed Bush Policy

Bloomberg.com
By Mario Parker and Kim Chipman

Nov. 6 (Bloomberg) -- President-elect Barack Obama plans to support unprofitable U.S. ethanol producers and pursue the same policies that failed George W. Bush.

Obama, the Democratic senator from Illinois, the second- biggest corn-growing state, will maintain Bush's goal requiring fuel producers use at least 36 billion gallons of biofuels in 2022, said Heather Zichal, the campaign's senior energy adviser. The ethanol industry, which loses about 66 cents a gallon at current prices, will receive at least as much support as from the current administration, including tax credits to spur consumption, she said.

"Obama recognizes how important the renewable and biofuels industry is to creating jobs and meeting our goal of reducing dependence on foreign oil," Zichal said in a Nov. 3 interview. "He's fully committed to it and sees tremendous value in the renewable fuels standard and continuing down this path."

Ethanol makers are collapsing after wrong-way bets on corn prices overwhelmed $20 billion in federal aid and government- guaranteed demand for the fuel additive. VeraSun Energy Corp., the second-largest producer, filed for Chapter 11 bankruptcy protection on Oct. 31.

Read the full story