Say Anything Blog

Why are they being subsidized?  Because high corn prices have made it hard to make money from ethanol.

North Dakota’s two newest ethanol factories have collected $1.78 million in state subsidies during the past six months, in part because high corn prices have made it difficult to profit from selling the alternative fuel.

From October through March, Blue Flint Ethanol of Underwood has received $901,521 in subsidies, state Department of Commerce records show. Red Trail Energy LLC of Richardton got $877,725 during the same six-month period.

Both factories, which are capable of producing about 50 million gallons of ethanol annually, have been operating for less than 18 months. Red Trail began making fuel in January 2007 while Blue Flint started manufacturing ethanol the following month.

So where are the subsidies coming from?  The farmers.

The subsidy fund is financed by a share of state registration fees on farm vehicles and a portion of North Dakota’s tax on agricultural fuel.

Just so we have this straight, we’re making farming more expensive with taxes to subsidize ethanol plants that would shut their doors if not subsidized by the state despite being heavily subsidized already from the federal level.

And before anyone claims that the ethanol plants benefit the farmers let’s remember that not all farmers grow fuel crops.

According to the article our political leaders are questioning whether or not voters would go along with an expansion of subsidies for these plants.  At a time when that same political leadership is opposing any real and meaningful tax relief in the state out of fear that they might not have enough to spend, the idea that they would pour more subsidies into a biofuel that hasn’t been marketable once in the over three decades its been in existence is ridiculous.

Its make or break time for ethanol.  Either the biofuel industry stands on its own two feet or it goes the way of other business ventures that can’t turn a profit on their own but aren’t so politically well-connected to survive on the backs of the taxpayers.