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Small 2011 Victory: Ethanol Tax Credits Expire

Though there are many energy-related items that we did not get accomplished in 2011, the expiration of the tax credit for ethanol is a good start. We haven’t discussed ethanol much at Resourceful Earth, but it is a “green” biofuel that is required by law to be blended into our nation’s transportation fuel supply, namely gasoline. In addition to being required by law to blend about 14 billion gallons of ethanol into our fuel supply, we have in past years also paid oil refiners $0.45 per each gallon of ethanol blended. There was also a corresponding tariff on ethanol imports that expired, meaning the industry had 3 separate subsidies.

My colleague Marlo Lewis was quoted in a New York Times article regarding how CEI worked with environmental groups (who also oppose corn ethanol because they believe it is environmentally harmful, rather than “green”) to defeat the subsidy:

Marlo Lewis Jr., a senior fellow at the Competitive Enterprise Institute, a public policy group that advocates free market principles, was active in the coalition opposed to the tax subsidy.

“Savvy people told me that this was a quixotic endeavor, that we would never see the end of the ethanol tax credit,” Mr. Lewis said. “But we pulled it off. Congress concluded that this was a special-interest giveaway the country could no longer afford.”

Ending the tax credit will save about $6 billion in 2012. Read the rest of the NYT article here, and go here for CEI’s recent work on ethanol.

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