Process trumps common sense in Senate but writing is on the wall for corn ethanol subsidies

The intricacies of Congressional process trumped common sense today, when the Senate failed to move forward with an amendment offered by Tom Coburn (R-OK) that would have ended decades of wasteful, environmentally harmful subsidies to the corn ethanol industry by sunsetting the Volumetric Ethanol Excise Tax Credit, known as the “VEETC”.

But procedural issues don’t change the facts.

Since 2006, the Renewable Fuel Standard (RFS) has required oil companies to blend increasing amounts of ethanol into our gasoline. Nevertheless, we continue to bribe oil companies to obey this law by paying them $0.45 cents for every gallon of ethanol they blend—at a cost of nearly $6 billion dollars this year alone—and shield the mature corn ethanol industry from having to compete in the market with a protective tariff on imported ethanol.

On the floor of the Senate this afternoon, Senator Feinstein referred to what she called the “triple crown” of benefits we lavish on the corn ethanol industry, something Senator Susan Collins also highlighted in her comments yesterday:

Historically, our government has helped a product compete in one of three ways: either we subsidize it, we protect it from competition, or we require its use. Right now, ethanol may be the only product receiving all three forms of support.

Despite this redundancy, the rationale for three decades of corn ethanol subsidies has always been that corn ethanol delivers a clean, homegrown alternative to foreign oil.

But corn ethanol isn’t clean. When all direct and indirect costs are added, creates more carbon pollution than the oil it is supposed to replace. On top of that, it increases water pollution, erodes our valuable soils, and increases the cost of corn sold in our stores and fed to our livestock, with devastating consequences for some of the world’s most vulnerable communities.

And as of last year, the U.S. became a net exporter of ethanol, which stands in obvious contrast to the goals of our biofuel policies, which amongst other things seek to reduce dependence on imported oil.

What do taxpayers get for the billions we spend each year subsidizing corn ethanol? Not much in terms of additional domestic production beyond what the RFS already drives and few additional jobs as a result. And by subsidizing the best and worst gallons of ethanol, the tax credit comes at the expense of developing the new and cleaner advanced biofuels we need.

Conventional ethanol made from corn is not the fuel of the future and continuing to subsidize the profits of big oil companies and old corn ethanol plants is something we simply cannot afford.  

That’s why the coalition of organizations opposed to corn ethanol subsidies—spanning business associations, hunger and development organizations, religious groups, agricultural trade associations, environmental advocates and budget hawks—is bigger, more diverse and stronger than ever. As this coalition has grown, so has strong bipartisan consensus amongst Congressional lawmakers that it’s time to end the VEETC and with it three decades of subsidies for the mature and polluting corn ethanol industry.

Or, as Senator Collins put it:

At a time when we are projecting a deficit, this year alone, of $1.5 trillion, why in the world are we spending $6 billion subsidizing ethanol? Subsidizing the blending of corn-based ethanol into gasoline is simply fiscally indefensible.

Process may have stood in the way of fiscal and environmental progress today, but the writing on the wall is clear: the days of massive handouts for corn ethanol are numbered. Congress should get down to business and stop sending good money after bad supporting the dirty, costly policies of the past. It’s time to invest in the clean energy technologies of the future.