An attempt by Senator Dianne Feinstein (D-California) to drastically reduce subsidies for domestic ethanol production and cut the tariff on imported ethanol was ultimately unsuccessful, reports Reuters. The proposal would have cut the annual cost of subsidies by $5.3 billion.
Ethanol is the alcohol produced by the distillation of various kinds of vegetation and can be found in many products including antiseptics and beverages. Its use as an automobile fuel has boomed in recent decades.
The letter submitted by Sen. Feinstein was rejected by a bi-partisan initiative from mainly Midwestern senators, many of whom have received campaign contributions from companies associated with ethanol production and distribution such as Monsanto and Archer Daniels Midland. A contribution search at MAPLight.org, a nonpartisan research organization, reveals that pro-ethanol subsidy senators accepted substantially more funds from ethanol-related companies than did anti-ethanol subsidy senators.
Ethanol plant in Iowa
The production and use of ethanol is a contentious issue. One one hand, the production of ethanol in the US reduces reliance on foreign oil imports and creates local jobs. It’s also a renewable resource and releases fewer particulates when burned. However, growing the corn destined for ethanol production requires vast tracts of intensively farmed land whose nutrient content can eventually become depleted. The production and transportation of ethanol is also expensive; in many cases it’s actually cheaper to import oil from abroad.
Feinstein said that ethanol has not fulfilled its promise to displace foreign oil, and that the tariff actually increases U.S. dependence on fossil fuel imports from the Middle East by discouraging imports of cheaper ethanol from more efficient producers in Brazil, Australia, and India.