[Congressional Record Volume 143, Number 13 (Wednesday, February 5, 1997)]
[Extensions of Remarks]
[Pages E174-E175]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 RESPONSIBLE REPEAL OF THE ETHANOL TAX

                                 ______
                                 

                            HON. KEN BENTSEN

                                of texas

                    in the house of representatives

                      Wednesday, February 5, 1997

  Mr. BENTSEN. Mr. Speaker, I rise to introduce legislation to 
eliminate the ethanol subsidy. This legislation is good fiscal policy, 
good agriculture policy, good environmental policy, and good energy 
policy, and I urge my colleagues to join me as cosponsors.
  The ethanol subsidy was established to help address the Nation's 
energy needs during the oil crisis of the 1970's. Unfortunately it is a 
program that has proven to be woefully inadequate. According to the 
Treasury Department, the ethanol subsidy cost the American taxpayers 
over $5.3 billion from 1983-94. The ethanol tax subsidy costs the 
Federal highway trust fund $850 million each year--and the revenue 
drain is increasing. Ethanol receives a 54 cents per gallon Federal tax 
subsidy on some 1.6 billion gallons of ethanol produced per year--with 
an additional 10 cents per gallon for small producers and from 10 to 80 
cents per gallon more from various States. But we have seen few 
benefits for this huge expense. In fact, a close examination of the 
ethanol subsidy shows that it not only has failed to live up to its 
billing, it has several negative consequences:
  Ethanol yields significantly less energy than gasoline. Per gallon, 
ethanol yields about 76,000 Btu, while gasoline yields between 109,000 
to 119,000 Btu. This means that ethanol provides only about two-thirds 
to three-quarters as much energy and mileage as conventional gasoline.
  Ethanol tax subsidies harm beef and dairy industries. Ethanol 
production competes with traditional feed grain customers for corn, 
driving the price of feedstocks up for the cattle industry and raising 
consumer prices for meat and dairy products.
  While ethanol does help reduce carbon monoxide emissions, it can 
increase ground level ozone, especially in hot summer weather. This is 
because ethanol makes gasoline evaporate more easily.
  Corn-based ethanol has had dubious results as an alternative fuel 
additive, and it is now

[[Page E175]]

time to let this program stand without taxpayer support.
  Proponents of energy subsidies and mandates say that they are needed 
to improve the environment, enhance energy security, spur economic 
development, and replace dwindling supplies of oil. However, this 
subsidy has proven to be both expensive and ineffective.
  Eliminating the ethanol subsidy is a positive beginning to balancing 
the budget and is a responsible choice for the taxpayers of this 
country. I urge my colleagues to cosponsor this legislation.

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