NOVEMBER 23, 2010

Even Al Gore Opposes Ethanol Subsidies

Yesterday, former Vice President and emperor of global warming alarmism Al Gore admitted that it was a mistake to support ethanol mandates and subsidies. Gore blamed the political dynamics, i.e., that the ethanol industry is one of the most powerful special interests around.

Total U.S. ethanol subsidies reached $7.7 billion last year according to the International Energy Industry, which said biofuels worldwide received more subsidies than any other form of renewable energy.

And those subsidies are on top of mandates to produce ethanol. Yet ethanol has also been shown to reduce fuel mileage, increase carbon emissions, increase smog, lead to water shortages, and increase food prices.

Yet not only does the federal government continue to offer tax credits, grants, and mandates to subsidize the ethanol industry, but the state of Pennsylvania does as well. In fact, Pennsylvania lawmakers, after a push from Gov. Rendell, approved a mandate that would require every gallon of gasoline sold to contain up to 10% ethanol—even after the evidence about the harmful effects of ethanol production were clear.

posted by NATHAN BENEFIELD | 11:35 AM | 0 comment

NOVEMBER 13, 2009

Corporate Welfare Goes Green

The solar industry, teamed with congress, is trying to get the Solar Manufacturing Jobs Creation Act passed. This act creates a 30% tax credit for solar manufactures and makes available a cash grant program. What is striking is that the solar industry is seeking this elite handout so it will not have to compete with other renewable energy resources for the $2.3 billion dollars already available through a tax credit.

Here in Pennsylvania $650 million in subsidies are available for alternative energy and conservation projects.

The problem is government should not be manipulating the market. It was a disaster when government forced ethanol into the energy sector; why would this be any different? Legislators should not ignore the signs.

A study in Germany concluded their solar PV industry would "vanish as soon as government support is terminated." Another study found that if the investment tax credits for solar PV development and production tax credits for wind energy in the United States were not continued in 2009, these established industries would lose 77% of their employees.

The fact is that if the solar industry cannot survive without government subsidies then it should not be there; it will neither create lasting jobs nor will it save taxpayers money.

posted by KATRINA CURRIE | 11:49 AM | 1 comment

SEPTEMBER 28, 2009

New Resources on National Energy Proposals

Earlier this month, Americans for Tax Reform (ATR) released an updated version of their booklet, Energy Tax Analysis. The report includes seven new areas of interest and thoroughly examines current energy laws, President Obama's proposals, and their disastrous effects for the energy sector.

Pennsylvanians' electricity bills and gas prices will soar if these proposals are passed. A federal renewable portfolio standard (RPS) would tighten Pennsylvanian's already existing RPS, which will cause electricity prices to skyrocket, and rejects municipal solid waste and hydroelectric power as renewable sources.

Additionally, ATR notes that voting for many of President Obama's proposals would be an infringement of the Taxpayer Protection Pledge, signed by seven members of Pennsylvania's Congression delegation (six House members and Sen. Specter).

The government should not be picking winners and losers; unfortunately that is what these proposals do, much like the failure of the government's subsidies on corn ethanol resulted in both an inefficient fuel, higher prices for corn, water shortages, and increased pollution. ATR concludes these proposals will result in higher prices and more inefficient energy sources.

posted by KATRINA CURRIE | 08:14 AM | 0 comment

MAY 27, 2009

Lose-Lose on Biofuels?

The American Magazine features an update on misguided ethanol and biofuel mandates, from a recent EPA report:

While the Environmental Protection Agency (EPA) analysis suggests that the switch toward renewables will decrease ammonia, carbon monoxide, and benzene, it also predicts “significant increases in ethanol and acetaldehyde emissions” and “more modest increases in nitrogen oxides, formaldehyde, particulate matter, hydrocarbons, acrolein, and sulfur dioxide.” Citing time constraints, the EPA did not do a full analysis of the net health effects of these emission profiles, but a reasonable assumption is that the detrimental health impacts from increased particulate matter will at least offset the health improvements from the predicted reductions in the other pollutants.

Supporters of the Energy Independence and Security Act of 2007 (EISA) also claimed that it will reduce greenhouse gases. Both Speaker Pelosi and then-President Bush said the bill will help reverse global warming. Indeed, much of the early enthusiasm for biofuels was based on the belief that their use would reduce greenhouse gases. It is true that burning biofuels results in less tailpipe emissions of greenhouse gases relative to burning petroleum. Yet this ignores the increase in emissions that results from the production of biofuels, especially the land use changes as farmers convert forest and grassland into cropland for biofuel production. An article published in Sciencemagazinein 2008 found that “corn-based ethanol nearly doubles greenhouse gas emissions over 30 years and increases greenhouse gases for 167 years.” Another article in Scienceconcluded that crop-based biofuels create a “biofuel carbon debt of 17 to 420 times more carbon dioxide than the greenhouse gas reductions that these biofuels would provide by displacing fossil fuels.”

posted by NATHAN BENEFIELD | 10:04 AM | 0 comment

AUGUST 14, 2008

Silly Senator, Corn is for Food!

ReasonTV video looks at the ethanol craze:

Ethanol, especially the corn-based variety, is bad for taxpayers, bad for consumers, bad for the environment, and horrible for the world's poor. In fact, even environmentalists are critical of ethanol subsidies these days. The ethanol craze has distorted markets and increased the price of food worldwide. The only people who still support ethanol subsidies are the ethanol producers—and politicians from both sides of the aisle. Together, they make sure the subsidies keep coming.

posted by NATHAN BENEFIELD | 09:59 AM | 0 comment

AUGUST 12, 2008

Texas Is Fed Up With Corn Ethanol

Texas Governor Rick Perry in the Wall Street Journal on why the EPA needs to suspend the mandate to produce more ethanol - which is, according to Perry and others, partly to blame for the spike in food prices (and economic losses tied to that).

Ethanol has also been shown to add to global warming, increase smog, and lead to water shortages.

posted by NATHAN BENEFIELD | 10:20 AM | 0 comment

JUNE 19, 2008

State Personal Income and Ethanol Policy

The BEA issued their quarterly update of state personal income. Normally, my comments on these reports are limited to how Pennsylvania is lagging behind the national average (true again this time).

But another major finding stand out - dramatic changes in personal income from farming. The news release points out:

The unusually wide range of state growth rates is largely a consequence of rising grain prices. Corn prices jumped 22 percent in the first quarter, while wheat prices rose 18 percent and soybean prices 17 percent. This added 6.4 percentage points to personal income growth in North Dakota where the farm sector is predominantly crop production. At the same time, the higher grain prices, which raised expenses for livestock growers, reduced personal income by 1.0 percentage point in Arkansas where the farm sector is predominantly poultry.

The trend is even more obvious when looking at the state data by industry. Farm income declined 7.55% nationally and 15.43% in Pennsylvania. The change ranged from 240% growth in farm income in North Dakota to a 334% decline in Wyoming (from $58 million in income to $136 million in losses).

I've pointed out before how ethanol mandates and subsidies drive up crop prices - encouraging farmland to be used for fuel, rather than food (the latest BOX program features Andrew Moylan talking about this as well). Now we see what the consequences are for the overall economy and especially the farm community.

posted by NATHAN BENEFIELD | 00:31 PM | 0 comment

JUNE 16, 2008

Biofuels Are Indefensible

Scathing editorial by the chairman of Nestle in the Wall Street Journal on the push for biofuels (including massive subsidies and mandates from government)

If there's one certainty, it is this: The production of biofuels has stimulated a massive, and destructive, reorientation of the world's agriculture markets. The U.S. Department of Energy calculates that every 10,000 liters of water produces as little as five liters of ethanol, or one to two liters of biodiesel. Biofuels are economical nonsense, ecologically useless and ethically
indefensible. This year, the U.S. will use around 130 million tons of corn for biofuels. This corn was not available as human food, nor as fodder to animals. Is this the right strategy, for a product that won't satisfy even a small percentage of our energy needs?

posted by NATHAN BENEFIELD | 10:34 AM | 1 comment

MAY 12, 2008

Who Gets Federal Energy Subsidies?

The Wall Street Journal has an article on who gets federal energy subsidies, based on a EIA report. The WSJ focuses most of the attention on electricity subsidies; as their headline notes the difference in subsidy per megawatthour - Wind ($23.37) v. Gas (25 Cents).

The discrepancy between ethanol and gasoline is equally disparate and fascinating, and given the role of ethanol in the global food price spike, the demonizing of subsidies for "Big Oil", and the call of Governor Rendell for state subsidies and mandates for ethanol. (Data can be found in the Executive Summary of the EIA report):

posted by NATHAN BENEFIELD | 02:04 PM | 0 comment