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Subsidies gone, ethanol will stand or fall on its own

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opinion Brainerd, 56401
Brainerd MN 506 James St. / PO Box 974 56401

Ethanol is in our gasoline. At least 10 percent of all regular gasoline is ethanol and in E85, the amount of corn-based ethanol is 15 percent mix. Now the industry is beginning to teeter after the federal subsidies were pulled at the end of 2011.

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Pulling federal 45-cent-per-gallon subsidy from the ethanol industry means the manufacturers will have to stand on their own. There are 200 ethanol plants in the U.S. Only 65 of them are making money following the withdrawal of federal subsidies. There will be a thinning out of the number of ethanol plants with some plants losing 25 cents on each gallon of ethanol produced. That does not bode well for marginal operations.

Up until the government rug was pulled out from under the industry, 14 billion gallons of ethanol was manufactured. That's 10 percent of the gasoline sold.

Just how much subsidy was given to this industry? Six billion dollars a year, called a blender's credit, known as the Volumetric Excise Tax Credit (VEETC), bolstered the industry as it was integrated into the gasoline blend. "With the subsidy gone, the ethanol industry is fighting to retain the federal mandate to blend ethanol with gasoline,” reported the Star Tribune. "The industry is also pushing for a higher blend of 15 percent, or E15, for newer cars and light trucks," the report said.

With the recent finds of huge oil deposits in North Dakota and larger known oil beneath the Alaska tundra, why is America still bent on forcing corn-based fuel on consumers? Rather than use a food source to create fuel, why not draw on known non-food source oil and preserve corn for animal and human consumption.

More jobs would be created in the United States if governmental restrictions on exploring and drilling for oil in areas of North America where we know there is oil. It would provide a huge economic boost, lessen our dependence on foreign sources for our nation's security, and allow other practical sources of energy to be explored. The demonizing of oil has proven to be economic insanity. Let's demand that our governmental leaders lead by opening up federal lands to explore and drill for oil. It's time to be independent of the Middle East oil reserves that have held the United States and much of the world hostage to OPEC pricing, while the billions spent on that oil comes back to us in the form of terrorism and threats against our national way of life.

—Keith Hansen

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