http://www.washingtonexaminer.com/biofuel-boom-budget-deal-gives-away-26-billion-to-biodiesel-industry/article/2648839
[links in on-line article]
As lawmakers scrambled to keep the federal government open last week,
biofuels lobbyists hustled for a payday. Tucked inside the budget deal
that found its way to President Trump’s desk and into law was a
retroactive extension of the biodiesel blenders tax credit. Now the
industry is about to get paid.
Biodiesel production nearly had a record year in 2017, according to EPA
data, churning out 2.6 billion gallons. Now the taxpayer will top off
the industry with an extra dollar for every gallon already sold.
But the industry isn’t happy with its $2.6 billion-dollar windfall
because the credit is only retroactive. It won’t apply to new
production, meaning that their bottom line will hinge on future lobbying
efforts. Already the industry is panning the free money as good but not
good enough.
“While we are pleased the credit was restored for 2017, in 25-plus years
of monitoring federal legislation, this is the most ridiculous outcome
I’ve ever seen. We will continue to work for a quick extension for 2018
and ultimately a common-sense long-term extension,” said Iowa Renewable
Fuels Association Executive Director Monte Shaw in a statement.
The next fight over the tax credit will more than likely come in the
farm bill. Republicans started signing checks to the biodiesel industry
during the George W. Bush administration in 2005. It’s more than likely
that they will continue, and it’s even possible that they will increase
under Trump.
But why does a multi-billion-dollar industry need taxpayer support? As
Reuters reports, biodiesel producers are reliant on federal aid and
cannot compete without it. And why do they deserve the money in the
first place? As Shaw and other industry leaders always argue, the
petroleum industry also gets subsidies, so it’s only fair.
“When you consider that petroleum is in its 105th consecutive year of
federal tax preferences, it is ridiculous that U.S. House members
objected to the two-year extension. Today, just as yesterday, the
industry has to produce and market biodiesel with no certainty over what
the final financial situation will be,” Shaw wrote. “That is not any way
to run a business.”
A better business practice would require creating a product that doesn’t
require taxpayer support. Similarly, good government would require
ending peculiar subsidies to both the oil and biodiesel industries.
