Ethanol facing trouble in Congress

Des Moines Register
Blog post by Philip Brasher • pbrasher@dmreg.com • July 14, 2010

The ethanol subsidy is running into trouble in Congress.

Citing a congressional study of the cost of the 45-cent-per-gallon tax credit, the chairman of the Senate energy committee issued a statement today saying that the subsidy should not be “reflexively” extended when it expires at the end of the year.

Sen. Jeff Bingaman, D-N.M. “thinks Congress needs to take a careful look” at the cost of the subsidy “as it decides whether or not to renew it,” said spokesman Bill Wicker.

The study by the Congressional Budget Office evaluated biofuel subsidies by the energy content of the products and found that costs taxpayers $1.78 to reduce gasoline consumption by one gallon using corn ethanol. The cost rises to $3 with ethanol made from crop residue and other forms of plant cellulose, for which there is a $1.01 per gallon tax credit.

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