UpdateMcCain opposes ethanol, oil subsidies

16 October 2008 19:02  [Source: ICIS news]

(Adds updates, detail throughout)

HOUSTON (ICIS news)--US Republican presidential hopeful John McCain would end subsidies given to the US ethanol industry as part of his opposition to all subsidies, including those for the oil sector, a campaign official said on Thursday.

The statement followed a fresh pledge by McCain to eliminate subsidies for the US ethanol industry if he is elected president in November.

The US gives blenders a 45-cent tax credit for each gallon of ethanol mixed in gasoline.

“Subsidies distort the market and create inflation,” McCain said on Wednesday during the last presidential debate with Democrat rival Barack Obama.

McCain also said he would eliminate the US tariff on ethanol.

“I was not surprised to hear the [subsidy] statement and wish he would have said the same thing about the oil industry,” said Jim Moseley, a McCain campaign official, during an interview on agricultural radio programme AgriTalk.

An Obama campaign official appeared on the same programme on 7 October and said Obama supported both government subsidies for ethanol and the US tariff on imports of the biofuel.

McCain supports renewable energy, Moseley said, but he is against mandates or protections for the industry.

Moseley, a former US deputy secretary of agriculture, said McCain opposes the federal renewable fuels standard (RFS).

The RFS requires the US to use to use 36bn gal/year of renewable fuels by 2022.

Senator McCain prefers to work on the demand side and create incentives that will draw consumers to ethanol instead of forcing it upon them, Moseley said.

Moseley cited better infrastructure, more flexible-fuel vehicles (FFVs) and ethanol (E85) pumps at service stations as incentives to draw consumers to ethanol.

Obama supports the renewable fuels standard.

For more on ethanol visit ICIS chemical intelligence
Bookmark Simon Robinson’s Big Biofuels Blog for some independent thinking on biofuels

By: William Lemos
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