Iowa Senator Chuck Grassley "Clings Tightly" to His State's Ethanol Subsidies

It's almost sad to watch.

Via Ethanol Producer Magazine:

On May 4, Sen. Chuck Grassley, R-Iowa, introduced the Domestic Energy Production Act of 2011, which he offered as “a good starting point” for ethanol tax policy reform. The bill recommends reducing VEETC from its current rate of 45 cents per gallon to 20 cents per gallon beginning in 2012, and reducing it again to 15 cents per gallon in 2013. Beginning in 2014, the credit would become a variable tax credit, allowing ethanol blenders to claim a 30-cent-per-gallon tax credit during times when oil prices are $50 per barrel or less. For those times when oil prices range from between $50 per barrel and $90 per barrel, the credit would vary based on the price of crude oil. If oil prices are $90 per barrel or higher, there would be no ethanol tax credit because blenders would have enough market incentive to participate in discretionary blending without additional tax credits. The import tariff would follow the blenders’ credit, but would not vary after 2013 and instead remain steady at 15 cents per gallon.

CBS claims the ethanol folk are excitedly awaiting a detailed plan on how certain presidential hopefuls would handle slicing the handouts:

Candidate Obama regularly claimed he would tell hard truths on the campaign trail but he never much did it. Pawlenty may be following the same model. But he does win some points for bravery, however. "The truth about federal energy subsidies, including federal subsidies for ethanol, is that they have to be phased out," he said. So Pawlenty wasn't just aiming at the $6 billion-a-year ethanol subsidy but all energy subsidies, including those for oil and solar and wind. Depending on what you define as a subsidy that could total anywhere from $17 billion, the conservative government estimate, to $50 billion, the estimate made by Doug Koplow, a specialist in energy subsides at Earthtrack in Cambridge, Mass.

That's just fine with the Iowa ethanol lobby. "Iowans look forward to Gov. Pawlenty further detailing his plans to 'phase out' petroleum subsidies, perhaps in a speech in Houston, Texas," said Walt Wendland, president of the Iowa Renewable Fuels Association, in a press release.

The funny part about all of this is that somehow it always ends up back at the evil speculators and terrible Big Oil who has us by the throat. As if destroying our engines with a food item when folks are starving halfway around the world makes any sort of sense. So much sense, apparently, that some members of the Handout Committee are fighting tooth and nail to keep things as they are:

“The House legislation…contains extreme cuts to energy infrastructure that would impair our ability to free our constituents from Big Oil and bondage to OPEC and hurt our economy,” their letter to the Senate committee says. “It nearly eliminates funding to install ethanol pumps at rural service stations – reducing it from $75 million to $1.3 million. The bill also further rescinds all funds that assist and encourage conservation practices that allow corn cobs, switch grass and other non-feed stalks to be brought from the farm to the pump through bio-fuel production. This apathy for energy infrastructure and domestic energy production is exceedingly foolish in the face of high gas prices caused by Wall Street speculators and unfriendly foreign oil.”


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Can a Republican House Stop Farm Subsidy Nonsense? Yeah Right

End Cornfield Protection Money. NOW.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.