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End of the line for ethanol? (bipartisan Senate group signs letter calling for end to subsidies)
Hotair ^ | 11/30/2010 | Ed Morrissey

Posted on 11/30/2010 1:20:26 PM PST by SeekAndFind

Has the federal government’s appetite for ethanol ended?  A bipartisan group of Senators signed a letter today calling for an end to subsidies and tariffs designed to protect and enhance domestic production of ethanol, which has been until recently the darling of the alternative-energy movement.  In a sign of how far ethanol subsidies have fallen from favor, the letter addressed to both Harry Reid and Mitch McConnell has the signatures of such liberal luminaries as Barbara Boxer, Dianne Feinstein, and the newly-elected Chris Coons:

In a clear sign of momentum against ethanol subsidies, a bipartisan group of more than a dozen senators has signed onto a letter urging Senate leaders to let the subsidies expire during this Congress, a move that could put many officials in a tricky political spot and could even have ramifications for the 2012 presidential race.

The letter, which I obtained from a source, was authored by senators Dianne Feinstein and Jon Kyl, and includes a number of Democrats and Republicans, including John McCain, Susan Collins, Richard Burr, and Mike Enzi. This is key, because the question of whether the subsidies should expire is emerging as a key test — just like earmarks — of whether Republicans are serious about reining in spending and the deficit.

While this issue could divide Dems along regional lines, it’s more directly relevant to the GOP. With leading GOP senators now coming out for letting the subsidies expire, this could up the pressure on Republican senators who backed the subsidies in the past, such as Chuck Grassley and Orrin Hatch, putting them on the wrong side of what may emerge as a key litmus test for the Tea Party and potentially dividing the GOP caucus.

Greg Sargent misses the significance of Boxer’s name on this list.  Boxer has a cap-and-trade bill stalled in the Senate, earlier versions of which relied on ethanol to meet its goals.  The ethanol subsidies allowed Midwest farmers to have some buy-in for a bill that would otherwise levy some significant costs on agriculture.  This more or less puts an end to that support, which means that Boxer has acknowledged the death of cap-and-trade.

Will this divide the GOP?  It will make for some contentious discussions on agricultural policy, no doubt, especially in the House where the GOP picked up a number of seats.  But it’s just as likely to hurt Democrats in the Senate, especially those running for 2012 re-elections from ag-heavy states.  Ben Nelson of Nebraska is the obvious incumbent for the hot seat, but Jon Tester in Montana and Mark Pryor in Arkansas also will have to answer for it.

It may, however, have some impact on the 2012 presidential nomination race, which starts in Iowa — the heart of corn country.  It’s not necessary for a GOP candidate to win Iowa in order to win the nomination — Mike Huckabee won it last year and finished a distant third — but it’s usually necessary for a candidate to do well in the caucuses.  Tea Party activists will see an end to subsidies as a success, but will GOP presidential candidates start pandering to corn farmers in Iowa to gain an advantage in the first round of the nominating process?  That may well be a good test for the sincerity of those candidates running as small-government conservatives.

The letter makes clear just how much the government has intervened to coddle ethanol production:

Historically, our government has helped a product compete in one of three ways: subsidize it, protect it from competition, or require its use.  We understand that ethanol may be the only product receiving all three forms of support from the US government at this time.

It’s long past time for those efforts to cease.  Converting food to fuel not only doesn’t work as a replacement for gasoline, it expands starvation by artificially inflating corn prices and making it more difficult to purchase.  This letter might be the first step in dismantling an expensive and ongoing failure.


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: energy; ethanol; subsidies
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To: RobRoy

Yes but there should be a way to phase out the law with provisions or mandates that specify increased domestic oil production coming on line for each ethanol plant that closes. We don’t want to just increase percentage f foreign oil !


41 posted on 11/30/2010 3:35:54 PM PST by aumrl (let's keep it real Conservatives)
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To: RobRoy

While alcohol has a lower energy content than gasoline, a higher percentage of the energy is extracted during the combustion process. In the end, you still get less energy out of ethanol, but not by as much as it would seem if you only compare energy contained, not energy released.


42 posted on 11/30/2010 3:39:08 PM PST by Darth Reardon (No offense to drunken sailors)
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To: SeekAndFind

About time, now if they would end all farm subsidies, that would be great.


43 posted on 11/30/2010 3:40:26 PM PST by upsdriver
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To: Darth Reardon

I know that I get a two to three MPG drop when I switch from real gas to the 10% mixture. I keep track of my mileage and type of gas used at every fill up, and I tend to run my tank to almost empty before I fill up because I am lazy and like to spend as little time at the gas station as possible.

The car is a Scion xB and I consider my evidence to be empirical. It may vary by car, of course.


44 posted on 11/30/2010 3:43:27 PM PST by RobRoy (The US Today: Revelation 18:4)
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To: aumrl

Naw. Just cut it loose. We’ll survive.


45 posted on 11/30/2010 3:44:16 PM PST by RobRoy (The US Today: Revelation 18:4)
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To: sbark
10% less of a more expensive poorer quality fuel.

Supply isn't a prob,...yet.

JCX2 here we come waaaaahooooo!!!!

46 posted on 11/30/2010 3:44:23 PM PST by rawcatslyentist (Jeremiah 50:31 Behold, I am against you, O you most proud, said the Lord God of hosts.)
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To: Buckeye McFrog

I think you hit the nail. They’ve seen the numbers.

Die Ethanol, Die
E-10 Sucks
Ethanol Fraud BTTT


47 posted on 11/30/2010 3:50:56 PM PST by Cold Heart
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To: sbark
Econ 101....10% less supply proabably means a price increase of at least 54 cents a gal....

More Econ 101.... open up more areas to oil drilling and the price will come down.

48 posted on 11/30/2010 3:53:17 PM PST by upsdriver
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To: SeekAndFind
paging AlGore...
49 posted on 11/30/2010 4:15:43 PM PST by Chode (American Hedonist - *DTOM* -ww- NO Pity for the LAZY)
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To: SeekAndFind

How will this affect people who plug their cars into the lampshade?


50 posted on 11/30/2010 4:54:40 PM PST by sergeantdave
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To: sergeantdave

How will this affect people who plug their cars into the lampshade?

****************************************************
As lampshades contain no energy , either in a volatile liquid format or in electrical form those people are going nowhere anyway. No Change.


51 posted on 11/30/2010 6:33:11 PM PST by Neidermeyer
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To: Obadiah

The subsidy is included in the American Jobs Creation Act of 2004 and is called the Volumetric Ethanol Excise Tax Credit. The mandate was included in the Energy Policy Act of 2005. So no, the subsidy and the mandate are seperate. FYI The Renewable Fuels Reinvestment Act, RFRA, was introduced in 2010 by Congressman Earl Pomeroy (D-ND) and and John Shimkus (R-IL) and would extend the tax credits set to expire on 31 December 2010. I hope they get kicked out asap.


52 posted on 12/01/2010 9:47:44 AM PST by Delacon ("The urge to save humanity is almost always a false front for the urge to rule." H. L. Mencken)
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