Ethanol subsidies may be in danger. What’s the Bird say?

A big fight over federal subsidies for ethanol production is shaping up.

The authorization of the billions of dollars in credits for the corn-based fuel is set to expire at the end of the year. Opponents are organizing to block an extension.

Associations representing grocers, meat producers, restaurants, environmentalists and taxpayers have mobilized against the proposed five-year extension. Food groups have to pay higher prices for corn when large amounts of the crop are diverted for fuel. Environmental groups argue that the method of producing domestic ethanol is damaging to the environment, and other groups argue that it is an unwise investment of taxes because ethanol will not make a big dent in gasoline use.

Opponents have generally not had much luck trying to block the ethanol credits, but are encouraged this year by new spending rules in Congress designed to limit government giveaways. Ethanol supporters would need to find equivalent cuts to continue roughly $5 billion worth of tax credits, 45s cents per gallon credit for blending the corn-made fuel with gasoline.

The ethanol industry argues that without the tax break, the oil industry will look to foreign countries to meet requirements of the federal Renewable Fuels Mandate for using ethanol in fuel. Corn growers in Missouri and Illinois support the extension, which contribute to the higher prices they get for their crops.

Read Saturday’s Post-Dispatch or go online to read Washington Bureau Chief Bill Lambrecht’s description of the upcoming debate.

source: interact.stltoday