Ethanol News From Across the Hall

Jeff Featherstun, an attorney at our firm, frequently writes about environmental issues on his blog, Outside of My Environment.  This week he tackled two stories involving ethanol that will be of interest to readers of this blog.  First, California's attempt to discriminate against  "Midwest" corn ethanol in favor of "California" ethanol was struck down as unconstitutional:

A federal judge recently struck down California’s program to reduce the “carbon intensity” of motor fuels, citing constitutional “interstate commerce” concerns that it discriminates against ethanol. The case was brought by groups that have an interest in corn ethanol, including corn growers, users, merchants and marketers of distillers grain (a by-product created during the corn-to-ethanol process that is fed to livestock), producers of corn ethanol, and importers of ethanol into California from other states.

Second, Jeff explained that nationally, ethanol subsidies were coming to an end:

Finally, a word on ethanol. On December 31, 2011, the tax credit for ethanol expired, ending an era in which the federal government provided more than $20 billion in subsidies for use of the product. The tax break, created more than 30 years ago, had long seemed untouchable. But in 2011, fiscal conservatives – who rejected it as a symbol of corporate welfare – joined liberal environmentalists – who disparaged ethanol’s carbon dioxide footprint and effect on world food prices for the poor – to kill it.

Whatever you think about the debate over government efforts to promote ethanol, the California law was something different. It discriminated against it on environmental grounds. Striking down the law was not only constitutionally required, it was good public and economic policy.

Continue reading the entire post: California Cap and Trade Capped.