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Should Congress Eliminate Subsidies on Ethanol and Give them to Alternative Energies like Wind and Solar

Investments in wind and solar energy are a key part of our nation’s energy strategy, but now is not the time for Congress to stop investing in ethanol in favor of these alternatives. 

While wind and solar energy need additional research and technological advances to make them more efficient and affordable, ethanol is a proven technology that has been in use for a century.  Today, ten percent of almost every gallon of gasoline you pump into your car is ethanol, reducing our daily consumption of foreign oil by hundreds of thousands of barrels.

But perhaps the main reason it would be wrong for Congress to cut investments in ethanol production is the same reason Congress shouldn’t be cutting spending in any sector – our struggling economy. 

Currently, the U.S. is producing approximately 4.5 billion gallons of ethanol annually but the Energy Policy Act of 2005 mandated that domestic production of renewable fuels reach 7.5 billion gallons by 2012.  The Department of Energy reports that for every billion gallons of ethanol produced, 10,000-20,000 people are hired – right here in America - to do the work.  At a time when our economy is hemorrhaging jobs, it would be disastrous to end investments in an industry that is growing and produced secure domestic jobs. 

There are some who say it’s dangerous to draw energy from a key component of our food supply.  Powerful special interests are already actively complaining to Congress that increases in food prices are the result of the Energy Policy Act.  While no one – even ethanol producers themselves - denies that using corn in the production of fuel has influenced food prices, so has the rising price of oil, international competition and bad weather.  Even though the price of a bushel of corn has been cut in half since the recession began, food prices continue to rise, as do the profits of our leading food producing companies.  Their real intent is to find a scapegoat to protect their profits.

Further, researchers at Iowa State University found the use of ethanol as a gasoline supplement reduces the cost by 40 cents per gallon saving individual Americans hundreds of dollars and the nation billions of dollars each year.  So there is some evidence that any increases in food costs that result from producing corn based biofuels are offset by the savings we get by using ethanol at the pump.

There are no simple or cost-free solutions to the world’s multi-faceted energy problems. Energy conservation, energy efficiency, and protection of the environment must be increased.  The economic and political power of the world’s giant energy conglomerates (including the oil company giants, electric utilities, and electrical equipment suppliers) must be controlled and cut back.  Solving America’s energy problems is going to take a broad, comprehensive approach that includes biofuels like ethanol and clean energy like wind and solar power.

All these industries are job creators.  The question is will Congress have the stomach to take on the powerful lobbies that dominate energy policy and squelch competition.  Or will they put the American people first and do what’s necessary to meet our growing demand for energy and need for good paying, secure jobs.

Don Kusler is Director of the Working Families Win project at Americans for Democratic Action.

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