The ethanol industry is fighting back against attempts to curtail billions of dollars in tax credits for ethanol companies that expire at the end of the year. The industry this week unveiled a series of ads aimed chiefly at big oil.
But ethanol has bigger opponents than oil these days. Brazil, for example, is lobbying Congress to reduce tariffs on ethanol made with sugar cane, which it says is more environmentally friendly than ethanol made with corn (as it is in Minnesota).
The Environmental Working Group notes that trees are cut down in Brazil to make way for sugar cane. And, it claims, the ethanol industry here takes credit for creating jobs that already existed:
The most egregious example comes in studies sponsored by another ethanol lobby group, the Renewable Fuel Association (RFA).2 The RFA consultant allows corn-ethanol to take credit for all the economic activity generated by growing corn, which was happening in commercial bulk long before the advent of ethanol. Over half (53%) of the jobs credited by the RFA consultant as being created by the corn-ethanol industry are in fact jobs that already existed for growing the corn that was already being produced for food and feed. Independent analysts rightfully criticize the RFA for dramatically over-estimating the employment impacts of their industry.
Other jobs that the industry did create in Minnesota are disappearing. An ethanol plant in Buffalo shut down just last week.
And Minnesota is cutting its subsidies to ethanol producers. Producer payments were cut by $4.4 million in order to help plug the large budget deficit in the state.
It’s a big fall for the industry, which brought big profits to farmers in the early part of the decade and had as much political clout as any industry in the country.