Anti-ethanol groups continue to fight tax credit

By Kris Bevill | September 23, 2010
Posted Oct. 13, 2010

A group consisting of industries historically opposed to corn ethanol production held a press conference Oct. 12 to reiterate its stance against ethanol subsidies, and corn ethanol in general. Representatives from food manufacturing groups, beef, pork and poultry producers and environmental activists took turns flinging accusations at the ethanol industry, blaming ethanol producers for everything from inflated grocery prices to global warming in an attempt to thwart rumored federal support to maintain ethanol subsidies.

"Whether it's a blenders' tax credit or an ethanol producers' credit, it still will cost American tax payers billions of dollars each year," said J. Patrick Boyle, president and CEO of the American Meat Institute, adding that extending the Volumetric Ethanol Excise Tax Credit would prolong the "unfair support and protection" that ethanol has received for more than 30 years.

The history of financial support awarded to ethanol was mentioned several times during the press conference, but speakers made no mention of the long-term support that the petroleum industry has received. In fact, Steve Ellis, vice president of Taxpayers for Common Sense, a lobby group focused on eliminating subsidies, went so far as to say that the ethanol industry is addicted to subsidies and should "grow up and compete in the marketplace." His comments focused on Growth Energy's plan released earlier this year, which proposed to use blenders' credits monies for the build out of ethanol infrastructure. "Swapping out tax credits for infrastructure credits is like an alcoholic saying, I'm going to give up booze' and simply switching to beer," Ellis said.

In an unprecedented move, several ethanol lobby groups joined together to release a statement responding to the coalition's attacks even before the coalition made its remarks. Growth Energy, the Renewable Fuels Association, the National Corn Growers Association and the American Coalition for Ethanol joined together to point out that the anti-ethanol groups are continuing to blame ethanol for things such as high grocery costs and indirect land use change, which have largely been disproven by scientific studies. "Constantly pining for fictional fuels or seeking to keep America hooked on the oil standard runs contrary to the desire most Americans have to become energy independent," the ethanol groups stated. "Instead of facts or new approaches, these groups are recycling tired rhetoric that does nothing to solve America's energy problems."

The anti-ethanol group's conference call occurred just days after the USDA decreased its expectations for this year's corn harvest as well as course grain reserves, causing speculators to drive corn futures prices to more than $5.50 per bushel. The American Meat Institute addressed rising corn prices and said it will inevitably lead to higher food costs. "The result will likely be higher prices for beef, pork and poultry as producers pass on higher feed costs." The ethanol groups stated that distillers grains will be able to displace more than 1 billion bushels of corn in domestic livestock rations this year for the first time, which should offset some of the livestock producers' feed costs. Growth Energy, the RFA and others also stated that less than half of the U.S. corn crop has been harvested, so an uptick in corn production numbers is still possible.