Ethanol Industry Weighs Options

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August 18, 2011

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by Joseph Morton (World Herald Bureau/Omaha.com) The ethanol industry is preparing itself for life after federal subsidies.

Key tax credits that pay blenders for using the renewable fuel are set to expire at the end of 2011. At a cost to taxpayers of about $6 billion a year, there seems to be no political will to extend them.

…That will likely mean higher prices at the pump for ethanol blends, which will prompt ethanol producers to consider new ways of marketing their fuel and to seek more politically palatable forms of government support.

…Motorists who use gasoline with 10 percent ethanol will likely see their fuel costs rise by a few cents per gallon. The price swing on E85, which is 85 percent ethanol, will be even more pronounced.

…(Monte)Shaw (executive director of the Iowa Renewable Fuels Association) is frustrated that people don’t realize how much money the government spends supporting oil and gas companies through such avenues as loan guarantees for pipelines.

“People have the audacity to ask: ‘Well when is ethanol going to be able to stand on its two feet?’ How about the day after big oil stands on its two feet? We’ll be right there,” Shaw said. READ MORE

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