Out with the Old, In with the New

Government investment in new forms of energy is nothing new. From the dawn of industrialization, the federal government has consistently promoted new energy technologies and infrastructure deemed critical to the national interest.

And that is for good reason, as the New York Times reports in yesterday’s editorial, Oil and Gas Had Help. Why Not Renewables? Bringing oil and gas technologies to commercial scale took significant government investment, but paid off in faster economic growth and increased production.

As tax breaks and government incentives were once necessary for the fossil fuel industry, they are today necessary to help commercialize cleaner, more efficient alternatives, like cellulosic and advanced biofuels.

But you need only glance at this chart, Shifting Energy Tax Breaks, to see how a permanent tax break for the now fully-developed oil and gas industry, dwarfs the incentives for other promising but less mature, fuels.

While the oil industry has been propped up for decades with permanent tax incentives – resulting in a near-monopoly on the American fuels market—tax credits for ethanol and other renewables have been erratic and provisional.

The ethanol industry has already volunteered to give up their temporary tax credit to pay for deficit reduction, incentivize cellulosic ethanol production and build out infrastructure to dispense higher level blends.

An industry offering to give up its own incentives? That’s about as rare in Washington as bipartisanship!

But it’s true - for well over a year, Growth Energy has been advocating for just that. We want to end the VEETC in favor of further investment in Flex Fuel pumps at gas stations across the country that will give millions more consumers an opportunity to choose their fuel based on price and performance – and help our nation meet the thresholds set by the Renewable Fuel Standard.

Thus, while oil continues to cling to their tax credits – and becomes dirtier, riskier and costlier to extract with each passing day—the ethanol industry has offered a sustainable path forward for continued innovation and expansion within the industry.

It’s time to stand up to the oil interests that have manipulated Washington politics for so long. Their product is harmful to the environment and forces our economy and national security to depend on foreign, hostile nations for oil. Sustained support for home-grown, renewable ethanol will strengthen our economy, clean our environment and decrease our nation’s dependence on foreign oil. That’s the kind of investment our nation needs for our future.