It's Not the Subsidy, It's the Mandate

http://www.futureofcapitalism.com/2011/07/ethanol-subsidy-and-mandate

NPR has a piece that notices a key point: while Congress and President Obama may eliminate the $6 billion a year ethanol subsidy, they aren't retreating at all on the mandate to blend gasoline with ethanol:

the government forces oil companies to use ethanol. And that mandate is growing. Next year, it will call for more ethanol than the industry produced this year.

That government mandate renders the tax credit irrelevant, says Bruce Babcock of Iowa State University....the ethanol mandate has a lot more friends than the subsidy did — and it's not likely to change anytime soon.

by Ira Stoll  |  Jul 21, 2011 at 6:25 am Related Topics:  Energy receive the latest by email: subscribe to the free futureofcapitalism.com mailing list