Politicians Continue to Confuse on Ethanol

by Brian McGraw on July 21, 2011

in Blog

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This time its former Rep. Jim Nussle (R-Iowa) writing in The Hill’s Congressional Blog:

But what people often forget is that the ethanol industry has been suggesting reform for more than a year. We recognized that the industry has changed, and that the policy must change as well.

The blender’s tax credit has been instrumental in developing the ethanol industry, but the most important challenge our nation faces today in securing our energy independence is not the continuation of this incentive, but access to a fair and open marketplace.

We have suggested a pathway that will not only create that market access but continue to provide the necessary incentives for developing the next generation of biofuels – cellulosic ethanol – to help our nation meet our stated goals of 36 billion gallons of renewable fuel by 2022.

Consumer choice at the pump is the most critical component of this plan to help us achieve this goal. Today there are about nine million Flex Fuel Vehicles in this country and the owners of these vehicles have a choice of fuel blends when they pull up to a Flex Fuel pump: E30, E50 or more. But unfortunately, there are fewer than 300 Flex Fuel pumps in the entire nation. Even as domestic automakers commit to making half their fleet Flex Fuel, the lack of pumps to serve this fleet means that most Flex Fuel Vehicles have never run on anything but gasoline.

These are the same tired lies they repeat over and over again. The ethanol industry wants as much government money as it can get its hands on, it just turns out that there aren’t many politicians willing to give them the cash in this environment. Aside from DoE regulations on higher blends of ethanol, the market is quite open for higher blends of ethanol, but no consumers want to purchase them.

And again, its quite clear that they support certain DoE regulations, such as their enforcement of the renewable fuel standard. Would they trade a hands off policy on regulating the approval of higher blends of ethanol in exchange for terminating the RFS? Absolutely not. They also support Corporate Average Fuel Economy (CAFE) standards because automakers are allowed to offset some of the mile per gallon requirements by producing flex fuel vehicles.

Little information has emerged on whether or not the industry will be able to get their ‘compromise’ stuck into the debt ceiling negotiations. Each public expenditure on ethanol creates more special interests involved with keeping the money flowing.

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