Taxpayers for Common Sense (TCS) on Thursday released a report detailing the variety of federal subsidies for biofuels like corn ethanol, the same day USDA Secretary Tom Vilsack announced more federal subsidies for the industry. The report, titled “Understanding Federal Subsidies for the Biofuel and Biomass Industries,” includes an overview of Federal Biofuels and Biomass Subsidies administered by various federal agencies, including the USDA, Department of Energy, Treasury Department, and the Environmental Protection Agency. The report catalogues dozens of programs and subsidies, including descriptions and dollars spent.
“After more than 30 years of federal backing for certain biofuels such as corn ethanol, the federal government should be scaling back – not expanding – its role in subsidizing the long supply chain of biofuels production,” said TCS President Ryan Alexander. “Biofuels have been sold as a tonic to achieve U.S. energy independence, reduce greenhouse gas emissions, and spur rural economic development,” continued Alexander. “They have not delivered on these promises, and more government subsidies is not the answer.”
According to a separate study by NERA Economic Consulting released Wednesday by the American Petroleum Institute, the statutory biofuel mandates under the Renewable Fuel Standard (RFS) are infeasible to achieve in 2015 and beyond and could cause severe harm to consumers and the U.S. economy. NERA also concluded the consumer demand for higher ethanol content gasoline like E85 and E15 is too small to serve as an outlet for higher ethanol mandates.
“While API continues to press for full repeal or significant reform of the RFS, we understand that will take time. And in the meantime, as the NERA study concludes, the consumer could feel the pinch in the form of higher energy costs. That’s why we urge EPA to reduce the total renewable fuels volume requirement and waive the cellulosic ethanol requirement for 2014, 2015, and 2016.”
The NERA study can be viewed here.
