I didn't realize the ethanol credit was not extended.
per RJ
ALTERNATIVE ENERGY
Corn ethanol tax credit coming to an end. For the first time in decades, U.S. corn ethanol will not be supported by an excise tax credit starting on January 1. The credit, currently $0.45 per gallon, will be expiring at the end of this year. While similar "sunset dates" have been set before, the difference is that in years past, Congress would invariably extend the credit. This time, however, Congress has left for the holidays without an extension, even a partial one (as the Obama administration supports). Keep in mind, the supply/demand dynamics in the ethanol market are such that the credit's main beneficiaries - to the tune of ~$6 billion in 2011 - have long been not the ethanol producers themselves but rather the fuel blenders, such as Valero Energy (VLO/$21.04/Market Perform) and ExxonMobil (XOM/$85.22/Market Perform). The Renewable Fuels Standard remains in place, so demand for corn ethanol will be essentially unchanged. Also, the cellulosic biofuel tax credit of $1.01/gal doesn't expire until the end of 2012, though so far there is almost no domestic production that benefits from it. |
