WBIA President Bob Sather recently wrote the follwoing letter to the editor to the Eau Claire Leader-Telegram in response to a recent editorial they ran calling for the end of ethanol subsidies.
To the Editor:
In its editorial page on National View “End costly ethanol subsidies,” the article failed to provide its readers any context, mislead them about the nature of U.S. ethanol production and offered no alternative to replace America’s addiction to oil. The amount of ethanol produced nationally last year was about equal to the amount of oil this country imported from Saudi Arabia. A study by Merrill Lynch cites that gasoline would be about $35 cents more without ethanol as a product in the motor fuel supply.
First, calling for an end to tax credits for ethanol while ignoring the billions of PERMANENT tax subsidies for Big Oil (the World Bank cites $500 billion last year) is as inequitable as it is shortsighted. Despite all members of Congress wanting more renewable energy technologies, they come before Congress with hat in hand for high risk investment. The oil industry, by comparison, only lobbies when the permanent subsidies it enjoys are threatened.
Second, American ethanol is a success story. Only lamenting the value of the tax credit for ethanol without discussing the economic benefits ethanol is misleading. For example, federal tax revenue generated by the production of ethanol and use of ethanol totaled more than $8 billion in 2009, $3 billion more than the value of the tax credit. Jobs and economic opportunity delivered to hundreds of rural communities further add to the value of investment in domestic ethanol production.
Third, the article suggests there are better technologies available without providing any evidence. There is no gasoline alternative technology that can match ethanol’s availability, production volume, or oil displacement benefits. Moreover, continued investment in ethanol is required to ensure promising next generation biofuel technologies, such as cellulosic ethanol for commercialization. Ending investment in ethanol will result in more oil consumption and severely curtail investment in new renewable fuel technologies.
Accordingly, this is a question of priorities. If the goal of assumption of the article is a level energy playing field, then it should call for the elimination of all tax provisions benefitting every energy industry – oil, natural gas, coal, nuclear, wind, solar, etc. Finally, if the real priority is ending our addiction to oil, then eliminating the permanent tax breaks for Big Oil and investing those dollars in renewable fuel technologies should be our goal.
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Wisconsin Bio Industry Alliance
11010 161st Street
Chippewa Falls, WI 54729