Ethanol Means Rural Prosperity
Posted: September 7, 2008
Many people support ethanol because it’s a cleaner fuel than gasoline, better for the environment and helps us reduce our dependency on foreign oil. But it really means much more to our nation than even those important reasons.
“It’s about small town diners, grocery stores, schools, libraries and churches,” said Don Hutchens, executive director of the Nebraska Corn Board. “Ethanol, by being produced across rural Nebraska and rural America, benefits all of these community-based businesses and groups. It does this by generating economic activity and taxes, which touches nearly every business, school and organization in town.”
Hutchens said the rural development aspect to ethanol should not be overlooked. “Ethanol production is well-suited to smaller communities, places that some people haven’t heard of,” he said. “Yet we all benefit because of the clean-burning fuel the ethanol plants produce. They add to our fuel supply and reduce oil imports, which saves us all money at the pump.”
To celebrate ethanol – and all renewable fuels – and what they contribute to Nebraska and the country as a whole, Nebraska Governor Dave Heineman will declare September Renewable Fuels Month at Husker Harvest Days this Wednesday.
Jeff Baker Said,
September 11, 2008 @ 7:03 pm
Which Party Will Make or Break Biofuels?
Biofuel is a bright spot in our economy. Corn Belt states now have cheap fuel, expanding economies, and budget surpluses. Ethanol refineries are coming online in numerous other states: Texas, Louisiana, Florida, Arizona, Oklahoma, Georgia, New York, Pennsylvania, and California. Alternative feedstocks such as sorghum, organic waste, biomass and algae are being introduced. The State of Louisiana and Renergie are building a network of small, localized sweet sorghum ethanol plants, with a 5 to 1 return. Subsidizing biofuels creates jobs, stimulates our economy, and generates County, State, and Federal tax revenue. Money back in your pocket. Every dollar spent on biofuel subsidies results in $10 in economic stimulus. So go figure.
Merrill Lynch reports that ethanol blended into regular gasoline lowered the cost by 15% and saved 60 billion dollars this year. The new ethanol blender pumps will make a bigger impact, depending on who gets elected President. Typically, blending ethanol with gasoline is done in large quantities by oil companies or fuel distributors. Who ever does the blending gets the 51 cent per gallon tax credit. With the new onsite blender pumps, the retail gas station will get the tax credit. That changes everything. Retailers are expected to pass along most of the blending subsidy to the consumer. Thus, the various blends, E20, E30, E40, E50, E85 will be about 40 to 50 cents a gallon cheaper at the blender pumps. Cheaper than ethanol already is. The Republican Party wants to discontinue the blending subsidy and take this discount away from you. The Democrats want you to have it.
Ethanol blended at the pump will compete head-on with regular gasoline. This is why Big Oil wants the Republicans to get rid of the blending subsidy. They are threatened by the coming blender pumps. Ethanol blends might soon outsell gasoline, as is the trend in Iowa, Minnesota, Kansas and other ethanol producing states.
The Republican Party receives huge campaign contributions from Big Oil and their intermediaries. Their battle cry is drill, drill, drill, which we need to do. But drilling now will only impact fuel prices moderately, 7 to 10 years from now. And why all the fanfare about offshore drilling, when oil companies already have 6,000 oil leases they’re not using?
The Republican platform also calls for eliminating the 54 cent per gallon import tariff on foreign ethanol. What they advocate is that we should lessen our dependence on foreign oil by replacing it with a new dependence on Brazilian Ethanol. This would increase our Trade Deficit and the interest we pay on the National Debt, because we pay for imported fuels with debt instruments and Government Bonds. Importing Brazilian ethanol would not save you much. After shipping and handling costs from Brazil to the U.S., oil companies would pocket the rest. The consumer might save a penny or two at the pump, but your hidden cost would be 6% floating interest on imported fuel paid for with debt instruments.
By following the Republican plan to end the ethanol import tariff, we would trade one dependency for another, drive up the Trade Deficit and the National Debt, and pay more revolving interest on imported fuel. Instead, we need to keep stimulating domestic biofuels.
The subsidies we pay on petroleum based fuel are SIX TIMES higher than what we pay on ethanol and biodiesel, even while oil companies make record breaking multi-billion dollar profits. If the Republicans want to discontinue Biofuel subsidies, they should also discontinue Petroleum subsidies. But, instead, they fight to keep $50 Billion worth of annual petroleum subsidies intact. Republicans are clearly aligned with their benefactors - Big Oil.
The Republican plan to end affordable biofuel subsidies would disrupt a sector of our economy that is thriving and cost you 40 to 50 cents a gallon at the pump. Ending biofuel subsidies is poor judgment and NOT in our National Interest.
The Republican Deception is: Big Oil First. Not Country First.
OPEN SOURCE, PUBLISH FREELY