How Taxpayers Subsidize the Oil and Ethanol Industries

Friday, June 17, 2011

Oil receives more taxpayer dollar support than ethanol, but ethanol is more dependent on the subsidy dollars for survival. In this piece on oil and ethanol subsidies, Todd Neeley shares the numbers and the sources he examined while preparing this report.

Neeley's report is an extensive and comprehensive detailing of all the supports, tax breaks, and subsidies the two industries receive, and he provides links for verification:

Here's Neeley's summary:

Tallying state, federal and other incentives exclusive to the oil industry, DTN's total comes to $17.9 billion annually. The comparable figure for incentives exclusive to ethanol is $7.1 billion. These figures do not include tax credits and other incentives that both industries share, such as the volumetric ethanol excise tax credit, also known as the blenders credit.

Total subsidies received by the oil industry, not just exclusive subsidies, range between $133.2 billion and $280.8 billion annually. It's a wide range, but a necessary one as many of the studies we looked at are made up of ranges themselves. Also, few if any, recent studies have been completed on many of the support areas we counted.

The comparative total support level for ethanol, not just exclusive subsidies, is at least $16 billion. The final number for ethanol is likely higher, due to the hundreds of state and local subsidies this young industry receives. We could not find a definitive list of such support, nor a firm dollar value for it.

People sometimes say, "If ethanol is so good, why would you have to subsidize it?" Well, if oil is so good, why would you have to subsidize it? Especially when oil companies consistently make obscene amounts of money?


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