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Obama in Corn Country: Ethanol Wants More Than a Lousy Presidential Thumbs Up

President Obama's three-state White House to Main Street tour was a chance to hold up the little guy; to go to rural America and talk about jobs, the future, the U.S. economy. And so Obama visited an ethanol plant, an industry propped up by so many government subsidies and a federal mandate that without them the fuel would've never made it into the U.S. gas supply. And that's not even accounting for ethanol's consumption of U.S. grain and its shoddy emissions record.

Since Obama came all that way, you'd think he'd at least give the people there what they wanted: some tax credit extensions, maybe, or a pledge to increase the ethanol blend wall to 15 percent. Anything. Instead, he just gave them his "I believe" shpiel and listed some of the things the U.S. government has done recently to help ethanol:

And the investment was part of the recovery act. It included $800 million in funding for ethanol fueling infrastructure, biorefinery construction, advanced biofuels research to help us reach the goal that I've set, which is to more than triple America's biofuels production in the next 12 years.
Heck, Obama didn't mention the word corn even once. (Although he was standing next to a front-end loader filled with the stuff.) Instead, he kept saying "biofuels," which could mean anything.

So what is the ethanol industry looking for? Plenty. And the industry will be pushing hard this year to secure every item on its wish list.

  • A multi-year extension of the 45-cent-per-gallon blender's tax credit
  • Extension of the 10-cent-per-gallon tax credit for small producers
  • Extension of the 54-cent-per-gallon tariff on imports
  • Corn ethanol would like to qualify as an advanced biofuel
  • E15 - The industry wants the blend wall -- the allowable amount of ethanol blended into gasoline -- raised from 10 percent to 15 percent
  • Country of Origin Labeling -- would require all fuels sold in the U.S. to list what country it comes from.
The ethanol industry also would love for a climate bill to pass that would preempt any state emissions laws. That's because under California's low carbon fuel standard, corn-based ethanol receive a worse emissions score than petroleum. In short, corn ethanol is unwelcome in California, which why late last year two industry trade groups field a lawsuit in federal court challenging the constitutionality of the low carbon fuel standard.

Here's the problem: No fuel needs both a mandate and subsidies. The renewable fuel standard mandates refiners to mix certain amounts of ethanol into the fuel supply. By 2015, that means 15 billion gallons of ethanol. At the same time, taxpayers are forking over 45 cents for every gallon, which goes to the refiner, by the way, as an incentive to use the fuel. So, that's $6.75 billion spent to encourage refiners to use a fuel that they're already required to.

Photo of corn from Flickr user mike@bensalem's, CC 2.0 See additional BNET Energy coverage on ethanol: