skip to main content
OSTI.GOV title logo U.S. Department of Energy
Office of Scientific and Technical Information

Title: Ethanol fuel: the policy issues

Abstract

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

Authors:
OSTI Identifier:
6112168
Resource Type:
Journal Article
Journal Name:
Forum Appl. Res. Publ. Pol.; (United States)
Additional Journal Information:
Journal Volume: 3:4
Country of Publication:
United States
Language:
English
Subject:
09 BIOMASS FUELS; 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; 090222* - Alcohol Fuels- Preparation from Wastes or Biomass- (1976-1989); 299003 - Energy Planning & Policy- Unconventional Sources & Power Generation- Other- (-1989)

Citation Formats

Grinnell, G E. Ethanol fuel: the policy issues. United States: N. p., Web.
Grinnell, G E. Ethanol fuel: the policy issues. United States.
Grinnell, G E. . "Ethanol fuel: the policy issues". United States.
@article{osti_6112168,
title = {Ethanol fuel: the policy issues},
author = {Grinnell, G E},
abstractNote = {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},
doi = {},
url = {https://www.osti.gov/biblio/6112168}, journal = {Forum Appl. Res. Publ. Pol.; (United States)},
number = ,
volume = 3:4,
place = {United States},
year = {},
month = {}
}