As a current fellow of the 2011 Leadership Delaware class, I had the opportunity to hear varying opinions on the topic of renewable energy during the June meeting of our class. One topic of particular interest was the continued subsidizing of ethanol production as a better alternative to gasoline.
This week, the U.S. Senate voted 40-59 against ending the roughly $6 billion in federal monies used to subsidize the ethanol industry. To be clear, this is not just a partisan issue as members of both parties were on both sides of the debate. Both Delaware senators also voted against the repeal of the ethanol tax credits, and Presidents Bush and Obama have been vocal supporters of ethanol as an alternative energy.
By law, the United States must use 15 billion gallons of renewable fuels such as ethanol by 2015, up from the 10.5 billion used in 2009. With the need for more renewable fuels then already mandated, why not use this opportunity to slice $6 billion out of the federal budget?
I recently purchased a 2011 Ford Escape that is touted as a “flex fuel vehicle” capable of running exclusively on an 85% percent blend of ethanol or E85. While this did not factor into my decision to purchase this vehicle, out of curiosity I did a search to find the nearest fueling station where I could purchase E85. According to www.E85fueling.com, the only gas station in Delaware to offer the E85 blend is located in Bear, with 31 others located out of state but within 200 miles of Wilmington. How convenient! While studies have shown that it burns cleaner, running a vehicle solely on E85 delivers about 23% less fuel efficient than gasoline. Aren’t we supposed to be taking fuel efficiency in the other direction?
Supporters say the continued subsidies are needed to reduce our reliance on foreign oil, further develop ethanol technology, and make it competitive with big oil. With the technology and innovation that continues to evolve, we should be working to increase efficiency and utilize alternative sources of energy. However, these technologies should be required to stand on their own in the free market at some point without the need for the continued crutch of tax subsidies.
This issue is bigger than the ethanol industry, as the fossil fuel industry is still currently subsidized to the tune of billions of dollars annually. With deficit and spending reduction currently the hot topic on Capitol Hill, why do we continue to subsidize any part of the energy industry? I would love to fill my vehicles with a cheaper, cleaner fuel that is less harmful to our environment, but I remain unconvinced that ethanol produced from corn is the answer.
Update: On Thursday, June 16, Both Delaware senators voted to end the Volumetric Ethanol Excise Tax Credit (VEETC), which provides a $0.45 per gallon credit to suppliers who blend ethanol with gasoline, as well as a tariff on imported ethanol of $0.54 per gallon.