Attention Ted Cruz (and others): Ethanol is not subsidized

Ted Cruz is a presidential candidate who continues to push the myth that ethanol is subsidized.

Even though the Iowa caucuses are now over, ethanol will likely remain a topic during the presidential campaign — especially if notoriously anti-ethanol and pro Big Oil candidate Ted Cruz continues to perform well.

Ethanol and homegrown biofuels will also remain in the news as the Senate recently began discussing the Energy Policy Modernization Act, which seeks to reestablish the federal government’s scope of authority across the national energy sector.

Unfortunately, whenever ethanol is in the news and the national spotlight, myths and misinformation follow. You’ll undoubtedly be hearing about ethanol “subsidies” (ethanol is not subsidized), corn ethanol “mandates” (there is no mandate for corn ethanol) and the “free market” (there is no free market in the energy sector, it’s dominated by petroleum).

Thankfully, organizations like the Renewable Fuels Association (RFA) are out there to sift through all the myths and misinformation to help the truth rise through the clutter and misguided talking points. RFA recently released a two-page questions and answers document that addresses myths surrounding ethanol, energy subsidies and the Renewable Fuel Standard.

You can read the document here. Here’s a sample:

Is there a “corn ethanol subsidy”?

No, contrary to what is often reported on the campaign trail, there is no such thing as a “corn ethanol subsidy.” The Volumetric Ethanol Excise Tax Credit (which was also known as the “blender’s tax credit”) expired five years ago in 2011. Further, it was gasoline blenders—not ethanol producers—who received the tax credit for each gallon of ethanol blended. The Small Ethanol Producer Tax Credit, which provided a modest tax incentive for ethanol produced by small facilities, also expired in 2011.

Want more? Here’s another sample:

But oil companies say they don’t receive government subsidies. What’s the truth?

While oil industry trade groups like to claim that fossil fuels aren’t subsidized by the taxpayer, nothing could be further from the truth. Oil producers and refiners are the recipients of $4-6 billion in federal tax incentives and subsidies every year, and many of these favorable tax provisions never expire. Some of the subsidies available to oil producers have existed for more than a century, and the Joint Committee on Taxation recently estimated that elimination of certain “fossil fuel preferences” (i.e., subsidies) would save U.S. taxpayers at least $24.5 billion—or roughly $210 per U.S. household—between 2015 and 2020.

There’s also a chart that details the numerous subsidies and tax credits enjoyed by the oil industry.

Once again, you can view the entire document here. Share it on social media, show it to your friends and bring it out every time you hear someone misguidedly ranting about ethanol “subsidies.”

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