Iowa Public Television


Ethanol Supporters Mark Anniversary

posted on March 15, 2013

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Millions of Americans will celebrate Easter in a couple of weeks with spiritual -- and culinary – traditions.  And for many that means a big ham dinner, decorative eggs, and of course, Peeps.

Manufactured by the family-owned Just Born company of Bethlehem, Pennsylvania, the famous candy celebrates its 60th anniversary this year.

Just Born will produce more than 1 billion Peeps this Easter – an all-time high  - and it sees the 60th anniversary as an opportunity to connect with its human Peeps to extol the virtues of the spongy confection made of sugar, corn syrup and gelatin.

Increasingly though, sugary treats are blamed, at least in part, for America’s obesity epidemic, and that’s leading to changes in public policy.  New York City Mayor Michael Bloomberg has even gone so far as to try to ban sales of larger sizes of sugary drinks.  Late last week though, that effort suffered a setback.

Ethanol enthusiasts celebrated this week. But the reason for the milestone was not welcomed by all.

The American Coalition for Ethanol held what it called a birthday party in Washington, D.C., complete with a cake.

The pro-ethanol group said this year marks a “Century of Subsidies” for Big Oil which they claim began in 1913.

 Rick Scwark: President, Iowa Renewable Fuels Association: Let me be clear, we’re not here to argue that every big oil subsidy should be eliminated. Or even to say that each and every one is bad policy, but we’re here to remind folks that Big Oil receives numerous tax subsidies, and some of them have been here for 100 years.”

The American Petroleum Institute says the argument is not new.

Dan Gunderson, American Petroleum Institute: “We’re celebrating as a nation the implementation of an income tax. The oil industry does not receive any subsidies. Deductions under the income tax that are available to any business are available to the oil industry. We’re not celebrating anything in that regard and at some point these organizations are going to have to face facts, from 2006 to 2011 the oil and natural gas industry had an effective tax rate of 44.3% which is higher than any other industry.”

The year 1913 marked the first time an oil subsidy was written into the U.S. tax code. The Revenue Act of 1913 allowed oil companies to write off 5 percent of the costs from oil and gas wells.

ACE officials countered they want a level playing field in the fuel industry.

Rick Schwark, President, Iowa Renewable Fuels Association: "Any discussion of a free market, or a level energy playing field, or consumer fuel choice, or government mandates and costly government subsidies, should keep the facts in mind. Policies such as Renewable Fuels Standard don’t discourage competition. To the contrary, RFS is one of the only laws on the books promotes competition in energy markets. The RFS encourages consumer fuel choice. The RFS encourages lower fuel cost and options for American families. And the RFS allows us to crack the big oil monopoly that has dictated our fuel choice for the last century.”

The American Petroleum Institute, which represents more than 500 of North America’s largest oil producers, counters it is not against renewables and some of their members already distribute ethanol.

Dan Gunderson, American Petroleum Institute: “So there’s more than enough opportunities for success in this industry. We’re just kind hoping at some point, folks who represent part of the ethanol, by no means all of it, will stop trying to muddy the water and we can have an energy policy moving forward where we’re truly independent.”

Tags: ACE Ag Committee agriculture American Coalition for Ethanol Big Oil birthday cake budget Congress Iowa Renewable Fuels Association news party RFS Rich Schwark subsidies USDA Washington D.C.