Ethanol is the Frankenfuel of the energy business, a subsidy-devouring monster that cannot be killed, no matter how great the political opposition. Farm-state senators have apparently succeeded in adding an extension of the ethanol tax credit, which is scheduled to expire at the end of the year, to the tax bill now working its way through Congress.
While that news is disheartening enough, the wind-energy business — the electricity sector’s equivalent of the ethanol scam — may also be winning in its effort to garner more federal subsidies. It is pushing lame-duck legislators to extend a part of the stimulus package known as the Section 1603 tax credit, which gives cash directly to wind-project developers. But what the wind boosters really need to keep their struggling business afloat is a mandate requiring the production of renewable electricity — at least 15 percent by 2020. And some Democratic senators are pushing a bill that would do just that.
Any legislation that provides more subsidies for ethanol or wind energy in the final days of the 111th Congress will be a major loss for taxpayers, as billions of additional dollars will be lavished on sectors that cannot survive in the free market.
Both industries have a long history of subsidies. The ethanol sector began suckling at the public teat in 1978 and has never been weaned. Instead, the industry has convinced Congress to provide ever-increasing volumes of taxpayer cash on the promise that their corn-distilled elixir will drastically reduce America’s need for foreign oil.
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