Late in June, the Senate voted 73-27 to end the corn ethanol tax credit, which gives oil companies about $6 billion a year to buy corn ethanol--the same corn ethanol the oil companies are obliged by law to buy under the renewable fuel standard. And then last week, Sen Feinstein announced that she had reached an agreement with Senators Thune and Klobuchar--both big corn ethanol supporters--that would greatly increase the chances of a bill ending the corn ethanol tax credit actually becoming law. (Here's a statement on the deal from a coalition of food interests, fiscal conservatives and enviros that NRDC signed on to yesterday.) If this agreement is enacted it will be a big step forward for taxpayers and the environment.
Beyond the specifics of the agreement, it represents a remarkable victory over King Corn and Big Oil. The Volumetric Ethanol Excise Tax Credit (VEETC) will die. Now or at the end of the year, it will die. And just as importantly in the long-run, the idea that King Corn and Big Oil never lose is dead.
NRDC's goal is to stop wasting any tax dollars on corn ethanol and the oil industry and to shift our biofuels policies to technology neutral, performance-based incentives. By this yard stick, the deal isn’t perfect: it would extend a tax credit for supposedly small corn ethanol refiners that are in reality not that small, waste some money on pumps that can blend ethanol (though this provision also extends support for electric vehicle charging), and extend the cellulosic tax credit without any new performance based requirements, but these provisions are far less costly and damaging than the VEETC, which would be repealed.
We need to end the rest of the waste on corn ethanol, but more importantly, we can now get back to pushing smart biofuels policies such as the Billion Gallon Challenge and the Greener Biofuels Tax Credit. We've got to get off oil and save our deteriorating atmosphere from all the carbon pollution our cars and trucks currently spew. We need 60MPG cars, electric vehicles and a good transportation bill.
A victory cheer with big thanks to Senator Feinstein! Onward and upward.