You understate the role of subsidies for ethanol. Without the massive subsidies, mandates, and import quotas, ethanol would barely exist commercially. Ethanol owes its entire existence to subsidies of some form.
When all else fails, ethanol boosters result to the “oil is subsidized” line. Any number of left wing websites and ethanol boosting websites tout the idea of subsidies to big oil.
This line about oil subsidies is false. The oil industry is heavily taxed at every stage of production. Some of the taxes are indirect as barriers to development. As a comparison, you should note the difficulty of building new oil refineries as compared to building new ethanol plants. The heavy taxation increases, not decreases the price of petroleum products.
The oil industry like other industries receives investment tax credits. The ethanol industry receives the same tax credits. I would be happy to see the corporate tax rate drop to 0.
The defense budget is not a subsidy to the oil industry as many left wing websites claim. We have a large defense budget because the world is a dangerous place. Terrorists and rogue states would like to attack us in many ways. Government policy has long existed to protect the free flow of trade. This policy was first instituted against the Barbary pirates 200 years ago.
The rats claim that oil leasing policies are subsidies to the oil industry. In the late 90s, the Clinton adminstration lowered the lease cost to encourage oil exploration. This action was taken due to the lack of development. The same rats are now trying to invalidate those leases, effectively breaking legal contracts. Leases on federal land should be auctioned to remove it from the political process.
Bottom line: ethanol boosters are falsely claiming that the ethanol boom is evidence of market forces. The ethanol boom is strong evidence of massive involvement of government to manipulate markets. This market distortion will have severe repurcussions for the US economy in the long term.
Deserves being repeated.
I agree that calling the defense budget a 'subsidy' to oil is incorrect.
However, Gulf War I was fought specifically to allow the oil companies to continue to operate in area, and continue the free flow of oil to the world. That clearly was a subsidy to the oil companies, one that benefited the oil companies and the American public both.
If we hadn't fought that war, the oil companies would have been forced to negotiate with Sadam, and while the outcome might have been acceptable to the oil interests, they would not have accrued to the best interests of the United States.