Unless you're an energy hound, you probably missed the news that the corn-based ethanol industry is giving up on its $5.5 billion annual subsidy that expires at the end of the year.
For more than three decades, the powerful ethanol industry has successfully pushed, prodded and cajoled Congress and presidential candidates with an eye on winning corn-rich Iowa's caucus to back the incentives. Their imminent death is both a reflection of the spending-cut-crazy Congress and the maturation of the industry.
And rest assured, while the industry is no longer fighting for the subsidies it does have its eye on a different prize.
My colleague Amy Harder explains for members:
Once considered sacrosanct, the $5.5 billion corn-ethanol subsidy is set to expire at month's end without so much of a peep from its powerful lobby. "We are planning on its scheduled expiration--perhaps the first industry in history to voluntarily let a subsidy expire," Matt Hartwig, spokesman for the Renewable Fuels Association, told National Journal Daily. ...The industry and its proponents in Congress and the White House are comfortable letting the tax credit expire because they know other policies in place will ensure a sustained market for biofuels.
Chief among those policies is the renewable-fuel standard, which requires the federal government to boost biofuel production by an amount that grows each year, rising to 36 billion gallons by 2022. That is roughly equivalent to 25 percent of the gasoline that U.S. drivers will use this year. (Today, biofuels make up about 10 percent of the transportation fuel market, with almost all of that coming from corn-based ethanol.) The Environmental Protection Agency, which sets the standard each year, is expected to announce the 2012 figure soon.
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