A few days ago Wayne posted his views regarding the Biofuel Boondoggle; as reported in the Christian Science Monitor. I happen to disagree with Wayne’s conclusions but I have no quibble with his criticism.
My disagreement is this: Wayne, like many Americans, seems suspicious of “Big Oil”. But, if you read the CSM story, it’s clear that those most likely to profit from any loopholes are biodiesel importers and producers. So if there’s any push to maintain the status quo regarding biodiesel tax credits it’s most likely to come from producers, who gain an export advantage, and importers, who can exploit the loopholes.
Here’s where I join with Wayne in his criticism: If we’re going to provide biodiesel tax credits they should be limited to biodiesel produced within the United States. They might even be further limited to biodiesel refined from crops grown inside our borders. But…wait…what if we went a step further and eliminated government meddling altogether?
If biodiesel is a good idea, and I happen to think it is, it should stand or fall all on its own. Let individuals form corporations, raise funds via private investment, and market their product to consumers. Without taxpayer funded subsidies. As a matter of fact, the potential for a reduction in or, preferably, complete elimination of all farm subsidies happens to be one of the reasons I’m so enamored with biodiesel. But I’m beginning to believe that if, as some say, Americans are addicted to oil - farmers are equally addicted to subsidies. Case in point: “…the National Biodiesel Board joined the ASA (American Soybean Association) in seeking an additional federal subsidy of 43 cents per gallon in the 2007 farm bill.”
Are you kidding me? The current crop of biofuel subsidies is responsible for biofuel refineries being built beyond demand as it is. Instead of increasing subsidies we should be looking at limitations followed by elimination. Don’t get me wrong, though, as a a proponent of Say’s Law, the foundation of supply side economics, I don’t really have a problem with over-built capacity. I just think it should be done without federal intervention. How ’bout you?
Trust me when I tell you that the big oil companies will get a hold of these Biodiesel refineries in the long run and then we will be at their beck and call once again. The only difference being that the base will be grown mostly in our own country. Why mostly? Well if we find that we can’t grow enough vegetative material to support our biodiesel refineries then we will be importing the rest of it. There needs to be legislation put in place to ensure that the vast majority of the base is grown in this country so that we don’t just create another foreign import dependence. There also, in my opinion needs to be legislation put in place that limits the big oil companies holdings in this industry. What is going to keep them from throwing big money at these much smaller corporations and buying them all up? Big oil companies are showing record profits in the billions. I for one don’t want to see them get a hold on the biodiesel industry and start killing me at the pump there to.