The Progressive


A project of Common Dreams

For Immediate Release

EWG Public Affairs: 202.667.6982.

Will the Real Ethanol Beneficiaries Please Stand Up?

It’s Time for Congress to Stop Sending Billions of Taxpayer Dollars To Corn Growers, Big Oil Companies


month's election is being called a referendum on taxpayer-funded
bailouts and wasteful federal spending, but Congress may not have gotten
the message. It's poised to approve billions in additional federal
subsidies to the corn ethanol industry in the lame duck session that
began this week.

The subsidies that flow to the ethanol producers come through a tax
credit known as the Volumetric Ethanol Excise Tax Credit, or VEETC. It
will expire at year's end unless Congress acts.

An Environmental Working Group (EWG) analysis of data compiled by the
industry's own trade association, the Renewable Fuels Association (RFA),
revealed some interesting facts about the state of the corn ethanol
industry and just who's getting the taxpayer-funded subsidy dollars.

Eight years ago, there were 61 plants producing ethanol to blend with
gasoline in the United States; today there are about 200. And eight
years ago, 13 percent of those plants used a feedstock other than corn;
today, just 5 percent rely primarily on alternatives like wood waste and
sugar cane.

Back in 2002, a bushel of corn cost $2.37; today the price has almost
tripled to $5.86. And over that same period, farmers went from owning
about half of all ethanol plants to just 19 percent today. So who is
collecting the lion's share of the tax-dollar subsidies if it's not the
family farmer? The oil companies.

Designed to make the fuel more cost competitive, the tax credit pays
refiners, including BP, Shell and Exxon, 45 cents a gallon to blend
ethanol with gasoline. Oil and gas companies get this tax subsidy
regardless of the price of ethanol or how large their profits are.

"While millions of Americans continue to struggle in the economic
downturn, multinational oil companies could continue to get billions in
taxpayer dollars if Congress caves," said Sheila Korth, a legislative
and policy analyst for EWG.

How times have changed! Eight years ago, the ethanol industry was
keeping up the pretence that corn ethanol was a "bridge" to advanced
biofuels. But figures like these, derived from the Renewable Fuels
Association's Annual own Industry Outlook, tell a different story.

Subsidized corn growers and corn ethanol producers and blenders are
reaping big profits, but the corn ethanol "bridge" will become a
"destination" if the industry gets its wish from Congress.

The full analysis by EWG's Korth can be found here:

The Environmental Working Group is a community 30 million strong, working to protect our environmental health by changing industry standards.

(202) 667-6982