The Government Accountability Office has completed its review of the ethanol production trends and has some advice for the Environmental Protection Agency.
Specifically, the GAO wants EPA to consider revising or phasing out a tax credit for blending corn-based ethanol with gasoline, primarily because, as the GAO report puts it, the domestic ethanol industry has "matured" and may no longer need a production incentive.
Without a significant increase in crude-oil prices, the 45-cent-per-gallon federal tax isn't likely to stimulate ethanol consumption to a level that exceeds this year's Renewable Fuel Standard, according to the report.
Sens. Barbara Boxer (D-Calif.) and Susan Collins (R-Maine) commissioned the GAO report to examine the potential effects of increased biofuels production.
Of course, not everyone agrees with GAO's assessment, the Renewable Fuels Association said the report failed to provide a comparison with subsidies provided to fossil fuel makers. RFA points to research that shows fossil fuel makers receive three times the amount of federal incentives.
"The tax incentive has been instrumental in helping build a renewable fuels industry in this country," RFA said in a statement on its Web site. "It should remain. As long as petroleum and fossil fuel companies that dominate the energy market continue to receive preferential tax treatment and hidden subsidies, incentives are needed to develop renewable alternatives such as ethanol."
Read the GAO's report.