Al Gore: No More Subsidies for Corn-Based Ethanol

Last Updated Nov 24, 2010 12:23 PM EST

Al Gore's recent lambasting of corn-based ethanol and the subsidies that support the homegrown fuel come at a critical time for the industry. At stake are two forms of federal support -- a 45-cent-per-gallon blenders tax credit given to refiners and a 54-cent-per-gallon tariff on Brazilian sugarcane-based fuel imports -- both of which are set to expire at the end of the year.

Without them, the industry has said, the domestically produced fuel will struggle. But Gore, despite his embarrassing admission this week that he once supported ethanol because of his presidential ambitions, is partially right about one thing. Gore said during a panel discussion at a green energy business conference, that subsidies for corn-based ethanol wasn't good policy, Reuters reported.

But I'd take it a step further: Subsidies are unnecessary because the federal government already mandates the use of ethanol. As blogger Robert Rapier has aptly pointed out, ethanol use tripled in the five years following passage of the Energy Policy Act of 2005, which established a renewable energy standard.

This isn't the first time Gore has given corn-based ethanol the shaft. As NYT's Green blog notes, Gore expresses personal disappointment in his 2009 book "Our Choice," over his decision to cast the tie-breaking vote in favor of moving forward with a large national commitment to ethanol.

But this time, Gore's words carry a bit more weight because the tax credit and tariff is set to expire just five weeks from now. And Congress is in a lame duck session, so it's not like much will get done.

It's not all bad news for the ethanol industry. Producers should be somewhat pleased with an apparent change in position from one of its longtime foes: the California Air Resources Board. CARB has recently suggested it will revise its analysis of the impact of corn ethanol on greenhouse gas emissions.

The upshot? Without a revision, corn-based ethanol's poor emissions score -- slightly worse the petroleum -- wouldn't meet California's low carbon fuel standard. That means the fuel would essentially be banned from use in the state. A revision to the analysis won't keep corn-based ethanol in California forever, but it will buy it at least a few more years on the market.

Photo from Flickr user Laurel714, CC 2.0
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