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Northwest Iowa Dairy Outlooks

A local discussion of current science and issues concerning dairying in northwest iowa

The Congressional Budget Office (CBO) has assessed the cost of various biofuels tax credits against their energy security and environmental benefits. CBO estimated the blender’s tax credit for ethanol will cost $7.6 billion this year. The report also concluded that, “After adjustments for the different energy contents of the various biofuels and the petroleum fuel used to produce them, producers of ethanol made from corn receive 73 cents to provide an amount of biofuels with the energy equivalent to that in one gallon gasoline.” Senator Bingaman noted, “Corn-based ethanol plays an important role in our nation’s transportation fuel mix. Thanks in part to corn-based ethanol, U.S. oil import dependence peaked in 2007, and is expected to decline further until 2035. But corn-based ethanol is now a mature technology whose market share is protected by an aggressive Renewable Fuel Standard. And ethanol prices are currently well below gasoline prices, making it even harder to justify the existing subsidy.” The ethanol blender’s tax credit expires Dec. 31, 2010.

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