Answer each of the following questions: 1. Explain the ethanol sub...
Question
Answer each of the following questions:
1. Explain the ethanol subsidy program. How does it work and how large is the subsidy? Can you estimate how much it adds to the per gallon cost of regular gasoline.
2. Critics of the corn-based ethanol subsidy claim that it is costly and serves little or no purpose. What, if any, are the benefits of mixing ethanol with gasoline? What is the impact on miles per gallon of moving from a blend of 10/90 (E10) to a blend of 15/85 (E15)?
3. Using the energy life-cycle methodology outlined by Dr. Coburn and reviewing various studies answer the following question: Does the production of ethanol actually use more energy than it produces? How much fossil fuel energy does it take to produce a gallon of ethanol?
1. Explain the ethanol subsidy program. How does it work and how large is the subsidy? Can you estimate how much it adds to the per gallon cost of regular gasoline.
2. Critics of the corn-based ethanol subsidy claim that it is costly and serves little or no purpose. What, if any, are the benefits of mixing ethanol with gasoline? What is the impact on miles per gallon of moving from a blend of 10/90 (E10) to a blend of 15/85 (E15)?
3. Using the energy life-cycle methodology outlined by Dr. Coburn and reviewing various studies answer the following question: Does the production of ethanol actually use more energy than it produces? How much fossil fuel energy does it take to produce a gallon of ethanol?
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As demonstrated by Taxpayers for Common Sense (2015), the ethanol subsidy program works by targeting systems that use ethanol. As such, a set of laws have been implemented to provide a range of support to these mechanisms. For instance, the United States Department of Agriculture supports ethanol lender pumps through the Commodity Credit Corporation, which is a fund preserved solely for farm loans. Besides, the law provisions for tax breaks for blender and bio-diesel pumps that have been designed to dispense higher ethanol blends. Also part of the ethanol subsidy program is the tax extender package. According to Taxpayers for Common Sense (2015), this aspect of the law stipulates a 30% tax break for facilities that install
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