One of the claims that the renewable energy groups continue to make, as their tax credits approach the chopping block, is that the U.S. is still unfairly subsidizing fossil-fuel energy sources. This is being used to justify the extension of the renewable energy tax credits, as renewable sources cannot compete…

Last weekend The New York Times published a letter from Wesley Clark, c0-chairman of Growth Energy. It was written in response to an editorial criticizing ethanol subsidies.

Wesley Clark has two main arguments:

• The building of oil infrastructure was subsidized by government, therefore subsidizing ethanol infrastructure is only fair
• Using government money to install ethanol pumps and mandating that new vehicles be flex-fuel compatible would create an “open market” where ethanol can compete with gasoline

An open market for fuel choice in America would be great. I don’t believe that:

(1) mandating the production of vehicles that are able to run on ethanol

(2) using government money or tax credits to encourage gasoline stations to install E85 pumps

(3) extending the tariff on foreign ethanol

at all constitute an “open”…

In a press release this week, Todd Sneller, administrator of the Nebraska Ethanol Board claimed, “if all the fuel sold in Nebraska in the past five years was E85, Nebraskans would have saved $2.6 billion.”

Mr. Sneller might want to check his math.

The pump price of E85 doesn’t account for the decreased energy content of ethanol when compared with gasoline.  According to the AAA, the real price of E85 when adjusted for MPG/Btu was $2.846 – 20.7 cents more than the price of regular gasoline.

Moreover, the daily retail price data reported by AAA illustrates that the E85 MPG/Btu adjusted price has been higher than retail gasoline prices since at least August, 2007.  Nebraskans are losing money at the pump…