Home Energy and Environment Sen. Webb: Ditch Corn Ethanol Subsidies

Sen. Webb: Ditch Corn Ethanol Subsidies


Thanks to Senator Webb for pushing to ditch our ridiculous subsidization of the corn ethanol boondoggle. If you’ve read anything about this issue, I’m sure you know that subsidizing corn ethanol is one of the most counterproductive, harmful, egregious forms of taxpayer-funded corporate welfare on the books. Other than benefiting a few big agribusiness companies, who don’t need the help, what does subsidizing corn ethanol accomplish? Actually, it’s worse than nothing, as it helps drive up food prices (by using large percentages of the U.S. corn crop for fuel, not food), harms the environment, costs billions of dollars a year, sucks up huge amounts of water and fertilizer, etc., etc. It’s pretty much a total debacle and should be repealed immediately for all of these reasons. Which, of course, probably means that our wonderful Congress, in its infinite wisdom, will keep the subsidies or even expand them. It’s utterly maddening.

Senator Webb Cosponsors New Bill to Repeal Corn Ethanol Subsidy, Reduce Ethanol Tariffs

Bill is estimated to save taxpayers $6 billion a year

Washington, D.C. – Senator Jim Webb (D-VA) yesterday joined Senator Dianne Feinstein (D-CA) to introduce legislation that would repeal the 45-cent-per gallon subsidy for corn ethanol blenders, saving the nation approximately $6 billion a year.  The bill also lowers the tariff on imported ethanol to match the 45-cent-per gallon subsidy that will remain in place for non-corn, second generation “advanced biofuels.”

“Eliminating or reducing ethanol subsidies and trade barriers would help decrease the budget deficit, benefit the environment, and lessen our reliance on imported oil,” said Senator Webb. “Historically our government has helped a product compete in one of three ways: subsidize it, protect it from competition, or require its use. Ethanol may be the only product receiving all three forms of support from the U.S. government at this time.”

Senator Webb has long been concerned about the negative effects of ethanol protections in the United States on other sectors of the economy.  In November 2010, he signed a bipartisan letter with 16 other Senators that called for an end to ethanol subsidies and tariffs.  Senator Webb also partnered with Senators Feinstein and Shaheen in December on an amendment to tax legislation that would redirect funding from ineffective ethanol subsidies and tariffs toward advanced energy technologies and U.S. deficit reduction.

Additional background on the “flip”


The ‘Energy Independence and Security Act’ requires that 13.95 billion gallons of ethanol be blended into gasoline in 2011 under the Renewable Fuels Standard. Most of this blending is performed by large oil companies.

Ethanol blenders are also subsidized for complying with the Renewable Fuels Standard. They claim a 45-cent-per-gallon tax credit for every gallon of ethanol they use, which has cost U.S. taxpayers more than $20 billion since 2006. Repealing the corn ethanol subsidy would save taxpayers approximately $3 billion in just six months.

Repealing subsidies for the corn industry does not require repealing incentives for next generation “advanced biofuels,” which are not produced from corn and reduce greenhouse gas pollution more than 50 percent when compared to gasoline.

Reducing import tariffs will serve to reduce U.S. dependence on foreign oil. Current tariffs are higher than the ethanol subsidy they supposedly offset. This lack of parity puts imported ethanol at a competitive disadvantage against imported oil, which discourages ethanol imports from Brazil, Australia, and India.  It also encourages oil imports from OPEC countries that enter the U.S. tariff-free.


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