Last call for ethanol subsidy?

Listen to this edition of Field Notes

This week on Field Notes, cutting the sweet ethanol incentive.

I’m joined by Harvest Public Media’s Frank Morris to chat about why the ethanol blenders tax credit is on the chopping block, why it might be up for debate, and what the ethanol industry thinks about it.  

Here’s a refresher:

Renewable Fuel Standard: RFS for short, this is the government mandate that demands 36 billion gallons of fuel made from things like corn should be produced by 2022. To incentivize the production of this type of fuel that’s billed as renewable, and, of course, domestic, the next key word comes up:

Ethanol blenders tax credit: This credit is passed on to the companies that blend ethanol into gasoline. They get 45 cents per gallon. The oil refineries that blend it churn out a lot of gallons of 10 percent ethanol fuel, so it adds up to a lot of money each year paid out to companies that have to blend it anyway because of key word number one: the Renewable Fuel Standard.

Frank has a full story on the tax credit getting the ax.

In this episode we’re also joined by Don Close of the Texas Cattle Feeders Association.  Actually, a few months ago we did a show on ethanol where we just talked to people on the inside, and didn’t really consult with cattle groups, and that’s how I met Close. I brought him on the show to ask him what the cattle industry thinks of this golden moment for feed prices. These guys are serious about their corn feed, and it doesn’t make their lives very easy when we they have to pay a lot of money to keep their cows fed. Close says having to compete with the ethanol industry for corn makes running a cattle operation a lot more expensive.