Comments on: Big Government Screws Up Ethanol

By: DJK

DJK — Mon, 21 Jul 2008 01:21:03 +0000

MMmm coffee…. From Costa Rica….

By: Free In Idaho! » Blog Archive » Saturday Morning Coffee

Free In Idaho! » Blog Archive » Saturday Morning Coffee — Sat, 19 Jul 2008 13:34:25 +0000

[…] And then, if there’s still coffee left in the pot, The Liberty Sphere has a Second Amendment News Roundup. Oh yeah, there’s also some links to reports on government subsidies in the comments of my ethanol post. […]

By: BillH

BillH — Sat, 19 Jul 2008 13:25:14 +0000

GSI, no, I didn’t read the links. On my side of this sleepy little blog in sleepy little Boise I’m juggling the balls of my life as fast as I can. It only LOOKS like I’m retired!

Perhaps I’ll put them on my Saturday morning coffee list.

By: GSI

GSI — Sat, 19 Jul 2008 06:40:45 +0000

BillH, that sounds as if you have not opened the links and looked at them. If you do, you will find that the studies are highly critical of the nature and extent of government involvement in the industry. And the reports have been read by a lot of people — including Congressional staff. We count, so far, over 350,000 downloads of the original study. Here is a quote from another blogger in respect of the update:

In 2007, the Global Subsidies Initiative (GSI) of the International Institute for Sustainable Development (IISD). Commissioned a report simply to document and understand all the different ways that the US government subsidizes biofuels. The report titled, “BIOFUELS - AT WHAT COST ?” is freely available and is a fascinating read. It’s truly amazing how creative legislators can get when they want to hand out money to an industry.

The estimated subsidy for ethanol in 2008 alone is somewhere between $9.2 billion and $11 billion and the 2008 subsidy for biodiesel is between $1.5 billion and $1.8 billion. When all the subsidies for both types of fuel are added up from 2006 through the estimates for 2012, the total subsidies add up to somewhere between $66 billion and $91 billion. FYI. That’s a lot of money!

The biggest subsidy by far is the Volumetric Excise Tax Credit. I had no idea what this is until I read the report … Furthermore, the tax law for most subsidies of this sort is taxable. But not biofuel subsidies. Quoting from the report: …

By: BillH

BillH — Fri, 18 Jul 2008 10:47:10 +0000

I’ll leave your links in but with this caveat:

I am a hard core unbeliever in government subsidies, particularly for this sort of thing. If it takes the government shaking down the citizens and giving it to some outfit to prop up an idea that won’t be accepted on its own merits, or fly under its own power, it is NOT something the government out to be doing. Ranks right up there with payments to not grow certain crops, and bailouts of big corporations and banks. Let ‘em fail.

By: GSI

GSI — Fri, 18 Jul 2008 06:22:07 +0000

If you’re interested in eye-opening facts about the extent of government involvement — at all levels of government — in the U.S. ethanol and biodiesel industries, have a look at the two studies prepared for the Global Subsidies Initiative:

Biofuels - At What Cost? Government Support for Ethanol and Biodiesel in the United States

and

Biofuels - At What Cost? Government Support for Ethanol and Biodiesel in the United States - 2007 Update

On the GSI website you can also find studies on subsidies to the biofuel industries of Australia and the EU.