New foes lobby against ethanol subsidies, due to expire Dec. 31 amid budget-deficit concerns

The latest challenge to federal ethanol subsidies comes from a coalition of conservative and liberal groups. "Strange bedfellows including the conservative Competitive Enterprise Institute, liberal network MoveOn and even a Catholic missionary group came together on a letter urging Congress to let $6 billion in ethanol tax credits lapse at the end of the year," Jenny Mandel of Environment & Energy News reports. In total, 58 groups signed the letter urging Congress to let the subsidies expire.

"At a time of spiraling deficits, we do not believe Congress should continue subsidizing gasoline refiners for something that they are already required to do by the Renewable Fuels Standard," the coalition wrote. The groups added, "Letting the Volumetric Ethanol Excise Tax Credit expire will help control deficit spending without in any way hindering the development of advanced biofuels, which can help us meet our energy, environmental and food security needs in a fiscally responsible manner." (Read more, subscription required)

With bleak prospects for a renewable energy standard, advocates for renewables are fighting alongside ethanol proponents for extending tax credits. “If the RES doesn’t pass, and that’s a long-shot right now, and clearly we’re not going to have a price on carbon for a number of years, we’re left with tax policy as the only federal policy of any significance to promote renewable electricity generation,” Richard Glick, director of government affairs for Iberdrola Renewables, the country's second-largest wind developer, told Amy Harder of National Journal. Many ethanol producers predict if the tax incentive is extended it will be at a lower level than the 45 cents-per-gallon current level, perhaps 36 cents, Harder writes. (Read more)

Ethanol subsidies garnered another high-profile opponent recently as former Vice President Al Gore changed his previous position in favor of the subsidies. "It is not a good policy to have these massive subsidies for first-generation ethanol," Gore told a gathering of clean-energy financiers in Greece this week. He added that the benefits of ethanol are "trivial," The Wall Street Journal reports. Gore said of his previous support for ethanol, "One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president." (Read more)