The Hill News

In his July 27 blog posting “The economics of U.S. ethanol policy” Professor Bruce Babcock of Iowa State University reports the results of new research suggesting that allowing the current 45-cent-per-gallon ethanol blender’s tax credit (Volumetric Ethanol Excise Tax Credit, or VEETC) and 54-cent-per-gallon ethanol tariff to expire on Dec. 31, 2010 would have little or no adverse impact on the domestic ethanol industry.

That’s true only if you take a “Field of Dreams” view of the ethanol industry: If we mandate that Americans use more ethanol, then someone, somewhere will produce that ethanol.

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