The Ethanol Mandate: Don’t Tweak, Abolish (a costly fuel without a public purpose)

By James M. Griffin -- January 23, 2014

[Editor note: This post is taken from a new policy brief, The Latest Unanticipated Consequence in the Ethanol Fiasco, released by the Mosbacher Institute for Trade, Economics, and Public Policy at Texas A&M University. Professor Griffin, who directs the Mosbacher Institute, is also author of U.S. Ethanol Policy: Time to Reconsider? in The Energy Journal (Fall 2013).]

Executive Summary

The 2007 mandates to steadily increase ethanol content in gasoline have hit yet another roadblock.
Falling — instead of rising — gasoline consumption means that fuel blenders can no longer absorb the mandated ethanol quantities and still produce gasoline with no more than 10% ethanol content.
Auto manufacturers strongly object to raising the ethanol content above 10%.
Now, the EPA has proposed a one-time, one year waiver relaxing the 2014 mandate.

Energy Tax Reform: Scrap the Baucus Proposal (Part IV: Negative Wealth Effects)

By Glenn Schleede -- January 22, 2014

[Editor note: This is the final excerpt of a January 15 letter by Mr. Schleede to the Senate Finance Committee concerning the Baucus tax-reform proposal (December 18, 2013). Part I reprinted the executive summary and conclusions; Part II the high cost/low value of windpower. Part III the negative environmental effects of continued subsidization of windpower, including the “cleanliness” standard of the Baucus proposal.]

“Tax breaks and subsidies for wind transfer wealth from ordinary taxpayers and electric customers to “wind farm” owners, electric customers in some states, and the voluntary purchasers of high cost electricity from wind.”

During the past 20 years, a variety of tax breaks and special subsidies for the wind industry have had massive wealth transfer impacts. The proposed production tax credit (PTC) and investment tax credit (ITC) would extend such impact for years into the future.…

Energy Tax Reform: Scrap the Baucus Proposal (Part III: Environmental Issues)

By Glenn Schleede -- January 21, 2014

[Editor note: This is the third except of a January 15 letter to the Senate Finance Committee concerning the Baucus tax-reform proposal of December 18, 2013. Part I reprinted the executive summary and conclusions; Part II the high cost/low value of windpower; and Part IV will review the negative environmental effects of continued subsidization of windpower, including the “cleanliness” standard of the Baucus proposal.]

For more than a decade, the wind industry and its advocates have created a false impression among many in the public, media, and government that electricity from wind is “clean” and can be provided without adverse environmental and ecological impacts.

As demonstrated earlier, the production of electricity from wind actually results in emission of air pollutants because electric grid managers are forced by the availability of electricity from wind to keep other, generally fossil-fueled, generating units immediately available to compensate for the unreliability, intermittence, and volatility of the output from wind turbines.…