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The Best Biofuels Policy May Be None

Article by Bernard L. Weinstein February 13, 2013 //   2 minute read

Bernard L. Weinstein, National Journal With the nation suffering its worst drought since 1956, now is an appropriate time to reconsider public policies regarding the use of biofuels in the energy mix. Though direct subsidies to ethanol refiners, such as the 46 cents per gallon tax credit, have been discontinued, the 10 percent requirement to blend corn-based ethanol with gasoline remains. What’s more, the Obama administration wants to increase the mandate to 15 percent. With perhaps one-half of this year’s corn crop lost to the extreme heat and lack of rain, the existing mandate should be lifted immediately. Otherwise consumers will feel a double whammy from rising corn prices, both at the grocery store as well as the gasoline pump. In addition, those provisions of the 2007 Energy Independence and Security Act (EISA) dealing with biofuels should be repealed, most notably the requirement that petroleum refiners switch to cellulosic ethanol. As Deroy Murdock of Stanford University’s Hoover Institution pointed out recently, cellulosic ethanol simply doesn’t exist, and the one company attempting to develop this fuel went bankrupt in 2010. Nonetheless, the Environmental Protection Agency recently imposed a $6.8 million penalty on oil refiners for NOT blending cellulosic ethanol with gasoline, jet fuel and other products. Read More