Ethanol Subsidies: Bad for the Gulf, Good for BP

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Josh reported yesterday on the National Corn Growers Association’s attempt to put a farmer-friendly spin on the Gulf disaster by promoting ethanol as an alternative. But as Josh notes, ethanol production presents its own disaster for the Gulf. But it gets worse: among the major beneficiaries of our country’s corn-loving ways is BP. The oil giant stands to gain $600 million through ethanol tax breaks this year alone.

An analysis from Environmental Working Group finds that BP will bring in millions through the Volumetric Ethanol Excise Tax Credit (or VEETC), a tax break for refiners that blend ethanol into gasoline. The tax credit has become yet another handout to oil companies.

“As one of the largest blenders and marketers of biofuels in the nation, we blended over 1 billion gallons of ethanol with gasoline in 2008 alone,” BP boasts on its website. According to the Energy Information Association, BP is the fourth largest ethanol blender in the country.

EWG notes that in 2008 the VEETC was worth 51 cents per gallon, which means BP would have brought in $510 million. Now the tax credit is 45 cents per gallon, but “it is highly likely that BP is blending more ethanol now than they did in 2008,” EWG writes. Between 2005 and 2009, taxpayers shelled out $17 billion in credits to subsidize corn growers, according to EWG’s analysis.

CongressDaily has more on how Big Oil is a major beneficiary of these tax breaks.

So despite what the corn lobby wants us to believe, our ethanol policies are actually a boon for BP, too.

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You expect the big picture, and it's our job at Mother Jones to give it to you. And right now, so many of the troubles we face are the making not of a virus, but of the quest for profit, political or economic (and not just from the man in the White House who could have offered leadership and comfort but instead gave us bleach).

In "News Is Just Like Waste Management," we unpack what the coronavirus crisis has meant for journalism, including Mother Jones’, and how we can rise to the challenge. If you're able to, this is a critical moment to support our nonprofit journalism with a donation: We've scoured our budget and made the cuts we can without impairing our mission, and we hope to raise $400,000 from our community of online readers to help keep our big reporting projects going because this extraordinary pandemic-plus-election year is no time to pull back.

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