Government Incentives Key to Ethanol Expansion

John Davis

Right now, 98 percent of the ethanol produced in the U.S. is made from corn. But in order to meet the 2005 federal mandate of 7.5 billion gallons of ethanol a year by 2012… and then President Bush’s lofty goal of a 20 percent reduction in gasoline usage by 2017… and possibly now the U.S. Senate’s latest proposal of 36 billion gallons of biofuels by 2022 (with 21 billion gallons coming from something other than corn), it’s obvious there will have to be something other than corn fueling the green fuel. That’s where government incentives come in.

This article in Missouri Ruralist says state and federal subsidies that helped jumpstart much of the current growth will be instrumental in finding an even better source than corn to make ethanol:

While Congress is backing its standards with increased funding for renewable fuels research and development, the administration is taking steps as well. The Department of Energy announced this summer that it will spend $375 million in Tennessee, Wisconsin and California to develop non-food crops into biofuels. The department is already investing another $385 million in six alternative-feedstock ethanol plants in California, Florida, Georgia, Idaho, Iowa and Kansas.

The article goes on to point out that government incentives helped ethanol double its output since 2003. It seems to reason that those same kind of incentives will spur the next feedstock’s growth.

Ethanol, News