Intelligent Energy

Corn ethanol subsidies skate past budget battle

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The U.S. House may be slashing spending to address the government's revenue problem, but new corn ethanol subsidies have avoided the fray.

Corn ethanol subsidies remain as high as an elephant's eye.

Austerity is the new watchword in Washington, but expensive corn ethanol subsidies -- long criticized as being economically dubious and even environmentally harmful -- are still moving forward.

The U.S. Department of Agriculture is slated to being issuing grants and loan guarantees for gas stations to install corn ethanol ready pumps, USDA Secretary Tom Vilsack said today.

The pumps would fuel a growing fleet of vehicles that run on E85, an 85%-ethanol blend of gasoline. There are already over 2,335 E85 pumps installed in at U.S. service stations.

Coincidentally, most of the pumps are located in the Midwest, a region that is economically dependent on corn cultivation. Its Congressional delegation is widely known for fighting to maintain corn related subsidies.

Corn ethanol is also supported by the Obama administration, which is seeking to a marked reduction in oil importation within the next decade. That plan requires subsidies for ethanol fuel sources, and its logical that the Midwest's regional mix would include corn.

Congress spends tens of billions of dollars on corn ethanol subsidies alone, and there have been recent bipartisan efforts to suspend the payments, along with mounting evidence that runoff from increased corn farming harms fragile downstream ecosystems.

Meanwhile, the government continues to encourage its adoption. The EPA’s 2011 Renewable Fuel Standards require 8 percent of all fuel used in the U.S. this year to be from renewable sources, and corn ethanol is the clear winner.

From a policy perspective, cellulose from native perennial grasses like switchgrass is more sustainable, does not affect food prices, and yields better fuel. But anything that would displace corn is anathema to Midwestern Senators who are beholden to the local interests that get them reelected.

Politics trumping science - what else is new?

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David Worthington

Contributing Editor

David Worthington has written for BetaNews, eWeek, PC World, Technologizer and ZDNet. Formerly, he was a senior editor at SD Times. He holds a business degree from Temple University. He is based in New York. Follow him on Twitter. Disclosure