There was lots of activity this week on the fate of the Volumetric Ethanol Excise Tax Credit (VEETC) as the House Ways and Means Committee met to debate a green jobs bill and decide whether to include an extension of the ethanol tax credit as part of the package. At $0.45 per gallon of ethanol, the VEETC is a massive, taxpayer-funded subsidy for old corn ethanol, which irony of ironies mostly ends up benefitting big oil. The extension in question would cost U.S. taxpayers more than $5 billion per year and over $30 billion over 5 years. Because there’s an oversupply of corn ethanol, this is money that will go largely into the pockets of oil companies, generating no new innovation, little domestic production over and above what is already mandated by the Renewable Fuel Standard, few new jobs and little environmental benefit, as we’ve discussed here, here and here.
Though the issue remains unresolved for the time being, it’s clear Committee members are increasingly recognizing that using scarce taxpayer dollars to prop up a decades-old and successful industry like corn ethanol is wasteful and unacceptable. Despite a full court press by corn ethanol industry lobbyists aimed at getting Congress to extend the VEETC, key members are pushing back. Several Democratic members of the Committee have shown real backbone, standing up to old corn ethanol, including Representative Lloyd Doggett of Texas who made his opposition to an extension clear: “I’ve voted against it before, and I’d be inclined to do so again.”
As NRDC points out in a new Fact Sheet on the VEETC, instead of massive giveaways to big oil companies and old corn ethanol plants, we need Congress to support emerging energy technologies in non-polluting wind, solar, geothermal and advanced biofuels. Letting the VEETC expire at year-end will save billions in tax dollars, money that can be put towards these new, more competitive energy technologies that will create far less pollution and many more times the green jobs we need and the Ways and Means Committee is seeking to create.