Ethanol fuel: the policy issues
When petroleum prices fell in the early 1980s, the Synthetic Fuel Corporation was abolished and most subsidies for the production of nonpetroleum-based energy were terminated. Basic research on alternative sources of energy was reduced. Subsidies for ethanol fuel continued, however. A US Department of Agriculture (USDA) report estimated that, in 1984, government support for fuel ethanol amounted to about $15 per million British thermal units (Btu) of energy, compared to about $1 per million Btu for petroleum, natural gas, and coal. Federal support for ethanol took various forms, including loan guarantees, income tax credits, grants of government-owned grain and, most important, by exemption from part of the federal gasoline excise tax. The excise tax exemption presently is six cents per gallon of ethanol-gasoline blend. These blends, once commonly known as gasohol, now are promoted as ethanol-enriched gasoline. Because the blends consist of one part anhydrous ethanol and nine parts gasoline, each gallon of ethanol reduces a gasoline company's tax obligation by 60 cents. This tax saving enables gasoline companies to pay a higher price for the ethanol they use in the blends. 33 references
- OSTI ID:
- 6112168
- Journal Information:
- Forum Appl. Res. Publ. Pol.; (United States), Vol. 3:4
- Country of Publication:
- United States
- Language:
- English
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29 ENERGY PLANNING
POLICY AND ECONOMY
ETHANOL FUELS
ENERGY POLICY
FUEL SUBSTITUTION
GASOHOL
FINANCIAL INCENTIVES
SUBSIDIES
TAX CREDITS
ALCOHOL FUELS
FUELS
GOVERNMENT POLICIES
LIQUID FUELS
SYNTHETIC FUELS
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