U.S. Senate Votes To End Ethanol Tax Credits
In a 73-27 vote, Senate members from both parties recently voted to put an end to the Volumetric Ethanol Excise Tax Credit (VEETC) which many said was wasteful and costly in a time of extreme economic instability in the United States.
Ethanol, which is made from corn or sugar cane, was initially lauded as a cleaner burning and domestically-renewable alternative to gasoline. To encourage the production of ethanol, the government passed VEETC, a tax break that amounts to a subsidy of 45 cents per gallon to companies that blend ethanol into gasoline, costing taxpayers a total of $6 billion per year.
But, as many researchers and environmental advocates soon discovered, ethanol was not the safe and clean biofuel it was touted to be. In fact, research shows that not only were ethanol plants permitted to emit chemical pollution that was far above the normal limit for fuel production, the production process for ethanol actually consumed more fossil fuels that it replaced.
Not to mention the fact that agricultural subsidies encouraged farmers to divert much needed crops away from the food supply.
And as Care2′s Gina Marie Cheeseman pointed out:
From 2005 to 2009, $17 billion was spent in ethanol subsidies, according to an EWG report, Driving Under the Influence. During that time period ethanol blended into gasoline reduced overall oil consumption “equal to an unimpressive 1.1 mile-per-gallon increase in fleet-wide fuel economy.” A gallon of ethanol yields only two-thirds the energy as a gallon of gasoline. “At the national level, this means that the 10.6 billion gallons of ethanol burned in 2009 displaced just 7.2 billion gallons of gasoline,” the report stated.
Tax credits for ethanol were already set to expire at the end of 2011, but if signed into law the amendment approved by the Senate would revoke the $6 billion tax credit by July 1, and could save $3 billion dollars this year. Action is pending in the House of Representatives.
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