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E85 will be much more expensive than normal fuels without a new tax credit according to the coalition

The tax rebate on ethanol fuels is set to expire at the end of this year. This will vanquish the tax credit that allowed ethanol producers in the U.S. to export as much or more of the fuel to other countries than was used in American fuel tanks. Steven Rattner stated in a piece written for the NYT, “Because of the subsidy, ethanol became cheaper than gasoline, and so we sent 397 million gallons of ethanol overseas last year. America is simultaneously importing costly foreign oil and subsidizing the export of its equivalent.”
 
That exporting of ethanol is one of the reasons the tax break on ethanol is ending.
 
With the deadline looming for the tax credit, a coalition is forming to get federal tax law amended to allow E85 to get a tax cut. The new group will be called the Coalition for E85 and it is specific in that it isn't out to get the tax credit back for E10. The coalition will let that tax expire with no fight from its members, but it wants the E85 blend to gain a new tax cut or the coalition warns the days of E85 might be numbered.
 
The blenders that make E10 fuel that is in wide use, and is a mix of 10% ethanol and 90% unleaded are getting a 4.5-cent-per-gallon tax credit. E85 is getting a credit of 38.25 cents per gallon under the Volumetric Ethanol Excise Tax Credit or VEECT. This is the tax that expires in December.
 
What the coalition is seeking is a change that would allow the E85 blend to receive the Alternative Fuel Credit (AFC). E85 was excluded from the AFC originally to keep it from being able to qualify for both the VEECT and the AFC credits. With the VEETC being discontinued, the makers want E85 to now get the AFC credit to allow the E85 fuel to maintain closer price parity with normal fuels for consumers that drive Flexi Fuel Vehicles. Flexi Fuel Vehicles or FFVs are able to burn regular gasoline and E85.
 
The coalition is trying to raise $75,000 to hire a Washington lobby group to speak on its behalf.

Source: Platts



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Awww poor E85
By DoeBoy on 10/18/2011 1:09:10 PM , Rating: 5
If you can't produce a product and make money on it without government assistance perhaps you need to go back to the drawing board and come up with something that actually has a solid return on investment. Government shouldn't subsidize industry.




RE: Awww poor E85
By Flunk on 10/18/2011 1:22:09 PM , Rating: 5
I'm a very liberal person, but this is a huge waste of taxpayers money. Why should the government subsidize unprofitable and detrimental (to the price of food) industries?


RE: Awww poor E85
By FITCamaro on 10/18/2011 1:25:37 PM , Rating: 1
So are you against solar and wind which aren't profitable without government subsidies?


RE: Awww poor E85
By bollwerk on 10/18/2011 1:35:36 PM , Rating: 5
Solar has been around for 40+ years. There are plenty of solar companies making a profit without gov't assistance.

Also, ethanol is a complete waste of time and money. It is vastly inferior to other biofuels.


RE: Awww poor E85
By Reclaimer77 on 10/18/11, Rating: 0
RE: Awww poor E85
By Gurthang on 10/18/2011 2:05:05 PM , Rating: 2
quote:
Yes, they're all in China.


Actually everything I have read says the Chinese government is heavily subsidizing their local solar industries thus allowing them to dump prducts in global markets at prices that are hard for our companies to compete against.

So the question is do you think we should do about that?
A. No more subsidies for local solar companies, this stuff is a dead end let the Chinese have this market.
B. Tax the crap out of the imports from companies caught dumping and increase taxes on all other solar imports.
C. Increase investments in the solar industry or devise credits which favor products from local companies.


RE: Awww poor E85
By Reclaimer77 on 10/18/2011 4:39:37 PM , Rating: 3
quote:
A. No more subsidies for local solar companies, this stuff is a dead end let the Chinese have this market.


This would be the best option. There's really no demand for solar technology currently. People hate hearing this, but it's true. There's barely any market for solar. When half a billion dollars can't keep a manufacturer in business, something is wrong there.

quote:
B. Tax the crap out of the imports from companies caught dumping and increase taxes on all other solar imports.


Unfortunately this never works because it leads to "retaliatory" policies that end up hurting us more.

quote:
C. Increase investments in the solar industry or devise credits which favor products from local companies.


I believe that if something is worth investing in, the free market will get there first. "Investment" implies you get a return. Instead all we've seen is government "investments" of our money going down a black hole of corruption and greed to never be seen again. I would, obviously, be against increasing this practice.


RE: Awww poor E85
By spread on 10/18/2011 4:46:31 PM , Rating: 2
There's not much demand for anything currently. It's a recession and it's not over yet. Worldwide everyone's in trouble.

It's not solar that is the problem, everything is expensive right now because people don't have money to spend.


RE: Awww poor E85
By FishTankX on 10/18/2011 5:52:16 PM , Rating: 2
quote:
I believe that if something is worth investing in, the free market will get there first. "Investment" implies you get a return. Instead all we've seen is government "investments" of our money going down a black hole of corruption and greed to never be seen again. I would, obviously, be against increasing this practice.


While I generally agree, this is not always true. The government had to intervene to get electricity to rural areas, along with telephone access. If it weren't for such intervention some places still might not have such essentials.


RE: Awww poor E85
By mkrech on 10/18/2011 7:02:09 PM , Rating: 2
Not true.

Those "essentials" were available to all. Those living in rural areas simply needed to pay the fair market value for the services to be extended to their doors. All the government did was mandate rural service and then subsidize the that rural service at the expense of existing customers.

Sorry, but I must rant.
<begin rant>
Rhetorical question:
Why does government get to deem electric and phone service essential?
Historical answer:
Because our society reached to point where political power began to usurp capitalism and competitive edge gave way to political influence.

Ever since then, our society has continued to allow crony-capitalism to invade our government. Both sides are guilty, but only one side can turn the course.

Here's why:
The Democratic parties platform is primarily supported by the poor. Entitlement programs create a society where the poor must vote for those that would support entitlement programs or risk reducing their own standard of living. Since the poor can't support the cost of political machine, democrats must garner financial support by promising favoritism by using crony-capitalism to pick winners like Solyndra.

The Republican parties platform is primarily supported by middle and upper class voters. Republicans have been guilty of using crony-capitalism to support their political machine as well. Also, choosing winners by targeting subsidies and regulation has helped generate more middle and upper class voters. But, for the Republicans this is counter productive. Because, even well intended regulations and subsidies are not as effective as true free market capitalism for generating wealth. As such, the Republicans must take a laissez-faire approach to governing if they hope to successful. Any other approach is counter productive and only leads to less prosperity which in turn leads to greater support for the Democratic parties entitlement programs.

The Tea-Party, and even occupy Wall St people if they listen to the Tea Party and learn a little, is the grass roots movement that is needed to help push politicians back to supporting a pure capitalism, limited government society. It's really our only chance.
</end rant>


RE: Awww poor E85
By me_at_here on 10/19/11, Rating: 0
RE: Awww poor E85
By mkrech on 10/19/2011 1:52:45 PM , Rating: 3
Drinking the OWS Koolaid I see.

Carnegie, Rockefeller, Gates, Ellison et al are exactly what the 99% need. All of these people created wealth and not just for themselves. How many people have each of these employed in well paying jobs? Using just Microsoft as an example... how many poor oppressed workers can you find working for Microsoft? I see tens of thousands of well paid middle class employees that owe there standard of living to employment at Microsoft.

Now Marxism and socialism... how many Chinese died under Mao to generate the "wealth" of that society? How many workers in China now enjoy a lifestyle like your typical Microsoft employee (other than the ones employed by Microsoft in China)?


RE: Awww poor E85
By Hiawa23 on 10/18/2011 2:31:43 PM , Rating: 2
Seems, that we need to learn a thing or two from the Chinese. The way we are going it may not matter when they take over the great U S of A.


RE: Awww poor E85
By cruisin3style on 10/18/2011 3:43:23 PM , Rating: 2
not that it is what we should do, but i've heard they're subsidized...


RE: Awww poor E85
By Gondor on 10/18/2011 2:44:59 PM , Rating: 2
Mmm, ethanol ...


RE: Awww poor E85
By Solandri on 10/20/2011 2:19:12 AM , Rating: 2
quote:
Solar has been around for 40+ years. There are plenty of solar companies making a profit without gov't assistance.

The vast majority of economically feasible solar is thermal solar. You stick a water tank outside, paint it black, and use it to pre-heat water before it's pumped into your hot water heater.

PV solar OTOH is pathetic as a competitor to grid power. Currently it's at around 20-25 cents per kWh wholesale vs. about 4 cents for coal, 5 for nuclear. (Hydro is about 3-5, wind is within spitting distance at 7-9 cents.)

PV solar has one particular niche application which makes it economically sustainable - electrical generation off the grid. If you need to power the electronics in a weather monitoring station on top of a mountain, PV solar works really well. If you're on a multi-day camping/hiking trip out in the boonies, PV solar is a good way to power your electronics.

The percentage of the country's grid electricity generated by different technologies reflects this. 69% fossil fuels, 18% nuclear, 9% hydro, a hair under 3% wind. Solar is a negligible 0.07%.
http://www.eia.gov/electricity/data.cfm#generation


RE: Awww poor E85
By Flunk on 10/18/2011 2:04:23 PM , Rating: 2
How are both of those detrimental to the price of food? That's a completely irrelevant comparison.


RE: Awww poor E85
By RU482 on 10/18/2011 2:31:01 PM , Rating: 2
Drive through northwest Iowa and take a look at how much farm ground is eaten up by Windmills, and the supporting roads that were put in place.

minor, but notable


RE: Awww poor E85
By nafhan on 10/18/2011 2:34:22 PM , Rating: 2
Increased taxes (where gov. subsidies come from, of course) generally affect almost everyone in the supply chain - therefore: increased prices on most things, including food. It may not be as much of an effect as burning the food for fuel a la E85, but it will still have an impact.

Not saying subsidies are always bad... just pointing out that they do have an impact - especially if it cannot be shown that there's a benefit to offset the cost.


RE: Awww poor E85
By shin0bi272 on 10/18/2011 6:15:15 PM , Rating: 2
I like how your original argument had the price of food as a supporting argument then when you reply later its the entirety of your objection to the "stimulus" or "subsidy" or "tax credit"... that's funny.


RE: Awww poor E85
By spread on 10/18/2011 4:44:57 PM , Rating: 4
The subsidies have been useful in popularizing wind and solar and creating a viable industry. Now they can thrive by themselves and they should plan to reduce the subsidies over a period of years until it gets to zero.

Corn ethanol however is a complete joke. It's a sham and theft of American citizen's money and goodwill. Even moreso when you find out that subsidized ethanol is exported.

You take people's money to produce this product and then sell it for LESS to a foreign buyer than it costs to produce. Tell me is that not blatant theft?


RE: Awww poor E85
By trisct on 10/20/2011 2:51:51 PM , Rating: 2
Solar and wind do not use up food crops to produce energy. Its also harder to export wind.


RE: Awww poor E85
By Dr of crap on 10/18/2011 3:10:33 PM , Rating: 2
Yea, let's subsidize the E85. Please.
It a has been noone wants it fuel.

If it takes more energy to make it than the energy output where's the benefit??


RE: Awww poor E85
By Gurthang on 10/18/2011 1:47:54 PM , Rating: 2
While I agree that E10 and E85 should not be getting any tax breaks. That baby is all grown up now and needa to stop living in mom's basement rent free.

My feelings on governments using "incentives" like loans, tax breaks, etc. to draw companies to that country/state/city or grow technologies that are seen as straegicly important for the future are mixed. A well designed and managed program can grow an economy far more than the costs associated with it and sometimes will create whole new industries. Do they always work, nope.

A good example is the "space race" if you only look at it as Americans just trying to beat the Soviet Union to plant a flag on the moon. Then you are right it was a terrible case of government waste. But look at what we learned and developed for those programs and what those industries and technologies that grew up to go to the moon have done for us since and I think it would be hard to say that the journey to the moon was not money well spent.

Or to continue the metaphor I started, helping your kids pay for college can be a great investment. Letting them mooch off of you so they can play video games all day long after they should have left the nest not so good.


RE: Awww poor E85
By RU482 on 10/18/2011 2:32:23 PM , Rating: 2
I wonder what the ratio of tax credits is to the taxes paid by people employed in the ethanol industry.


RE: Awww poor E85
By Hiawa23 on 10/18/2011 2:30:08 PM , Rating: 2
If you can't produce a product and make money on it without government assistance perhaps you need to go back to the drawing board and come up with something that actually has a solid return on investment. Government shouldn't subsidize industry.

I agree 100%. I say end all subsidies for fuel companies. we need the money more than they do. I see gas prices are slowly going back up.


RE: Awww poor E85
By AssBall on 10/18/2011 3:00:59 PM , Rating: 3
While we are at it lets also do away with the over-inflated tax and regulations on consumable ethanol. Now we're talking!


RE: Awww poor E85
By DanD85 on 10/19/2011 5:18:42 AM , Rating: 2
Actually I'm not against your ideas about E85, I just recommend you read the book named "23 things they don't tell you about Capitalism", read it, think about it and later tell me about what you think about government subsidiary. It's not as bad as what you believe now.

Really I recommend all who really wish to understand more about how bad these "free-market capitalism" had done to our society and have a totally new view give this book a glimpse.


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