10% Ethanol, Heads Up!

[dmccarty]

How many dollars does the US Oil industry get in tax subsidies?

Some quick searches turns up the numbers between 3 and 6 billion dollars per year. Which is pretty low but I kept seeing numbers in that range. Here is one link to a website that I would hardly think is a supporter of the oil business. Eliminating tax subsidies for oil companies Climate Progress

The US is supposed to consume 143 billion gallons of gas and diesel a year.

Which works out to a tax subsidy of 2-4 cents per gallon of gas or diesel compared to a subsidy of $1.78 per gallon of Ethanol that was referenced earlier in this discussion.

Later,
Dan

 

[mmurphy]

How many dollars does the US Oil industry get in tax subsidies?

Some quick searches turns up the numbers between 3 and 6 billion dollars per year. Which is pretty low but I kept seeing numbers in that range. Here is one link to a website that I would hardly think is a supporter of the oil business. Eliminating tax subsidies for oil companies Climate Progress

The US is supposed to consume 143 billion gallons of gas and diesel a year.

Which works out to a tax subsidy of 2-4 cents per gallon of gas or diesel compared to a subsidy of $1.78 per gallon of Ethanol that was referenced earlier in this discussion.

Later,
Dan

You possibly may be right. I think your 1.78 a galon is another from what camp you are on. Some of this is not direct subsidies, but instead a tax break. Now some will say that is good for business. I agree, it stays right here in our country.
Agriculture still is one of the biggest employers, so that would in away cut the economy's throat.(eliminating subsidies)

 

[mmurphy]

I agree that conservation (or to use an Amory Lovins term, "negawatts") is a great idea. In my book it's the first order of business. But I also think that government subsidies to develop a domestic bio fuels industry, if done right, is still a good idea.

My understanding of this is that corn was never considered a viable long term feedstock but rather a substitute for the development of a process to use cellulose or other more practical input to ethanol production. In fact if I recall the EPA mandate defines what can be used as feedstock and by what ratio.

Certainly there's going to be failures and adjustments along the way to any alternative to what's been in place for almost a century. Isn't that what this thread is about really...perceptions, observations, adjustments ....to the impact of ethanol at these levels in our motor fuels? And who doesnt' think politics will always be a part of anything like this where so many special interests (some with very deep pockets I might add) are at stake? But a federal mandate is still in effect and I hope it stays there.

And remember, there's the example of Brazil where bio fuels have proven to be a viable replacement for much of that country's motor fuels. :thumbsup:

Keegs , I to have seen some of his work.
I also think if government wanted to get things a rolling, funding hydrogen would be the next thing around the corner to get going on. We would not need the big oil then. Ethanol also gives up its hydrogen molecules easier then most fluids. That could help in the rolling over to the hydrogen society.

 

[Duffster]

.

Which works out to a tax subsidy of 2-4 cents per gallon of gas or diesel compared to a subsidy of $1.78 per gallon of Ethanol that was referenced earlier in this discussion.

Later,
Dan

Ethanol is NOT subsidized $1.78 per gallon.

 

[dmccarty]

Ethanol is NOT subsidized $1.78 per gallon.

"CBO finds that before they even pay at the pump, taxpayers incur a cost of $1.78 to replace a gallon of gasoline by substituting corn ethanol."

Later,
Dan

 

[dmccarty]

You possibly may be right. I think your 1.78 a galon is another from what camp you are on. Some of this is not direct subsidies, but instead a tax break. Now some will say that is good for business. I agree, it stays right here in our country.
Agriculture still is one of the biggest employers, so that would in away cut the economy's throat.(eliminating subsidies)

CBO is the Congressional Budget Office. It usually is above the political fray. Even if the number is wrong it is hard to believe that it would be hugely wrong.

Later,
Dan

 

[Duffster]

"CBO finds that before they even pay at the pump, taxpayers incur a cost of $1.78 to replace a gallon of gasoline by substituting corn ethanol."

Later,
Dan

Show how they come up with that number.

In that same article they say that ethanol is subsidized $5.16 billion and we produce 10.8 billions gallons. That equals $0.48 but in the same article it say that it is $0.45. They then multiply the subsidy by 1.48 to come up with $1.78 per gallon.

The math just doesn't work out.

 

[dmccarty]

Show how they come up with that number.

In that same article they say that ethanol is subsidized $5.16 billion and we produce 10.8 billions gallons. That equals $0.48 but in the same article it say that it is $0.45. They then multiply the subsidy by 1.48 to come up with $1.78 per gallon.

The math just doesn't work out.

I assume this is because they are looking at all of the subsides used to produce the Ethanol which would include what the farmer gets for corn.

A subsidy of .45 cents a gallon of Ethanol is huge compared to 2 to 4 cents per gallon for Big Oil. The tax subsidies could and should end for big oil. It would not even be noticed. If the subsidy is taken away from Ethanol those companies will go out of business quickly.

Later,
Dan

 

[Duffster]

I assume this is because they are looking at all of the subsides used to produce the Ethanol which would include what the farmer gets for corn.

Farmers haven't gotten much, if any, subsidy for a while know since prices have been better.

A subsidy of .45 cents a gallon of Ethanol is huge compared to 2 to 4 cents per gallon for Big Oil. The tax subsidies could and should end for big oil. It would not even be noticed.

IF those numbers are correct you are right it is huge. I think subsidies should end for everything and let them stand on there own legs and let free market decide what survives.

If the subsidy is taken away from Ethanol those companies will go out of business quickly.

Not according to the article you previously quoted.

Later,
Dan

.......................

 

[dmccarty]

Then ADM will not mind the end of the tax subsidies.

I did not reference the article but the CBO report. Until someone provides better data than the CBO I will believe the CBO.

A 45 cent subsidy on a product that sells for say $3 is 15%. A loss of 15% of income could easily drive a company under especially in low margin business.

Later,
Dan