Feedstocks
Taxpayers paid part of the cost of producing ethanol. Each gallon was subsidized by a 51-cent/gallon federal tax credit paid to U.S. producers. These subsidies, along with state incentive programs, cost the nation over $2 billion a year, leading legislators to pledge to invest in cellulosic ethanol.
Another issue was the loss of income to American crude oil refiners, who earn as much as $30 or more per barrel. Exxon Mobil Corp. earned $1.3 billion in its refining arm in the second quarter, up 11% from a year before. The expectation, over the long run, is that the U.S. economy would more than earn its share back if our primary source of energy were manufactured and processed in the United States, but individual companies could be adversely affected.
Read more about this topic: Ethanol Fuel In The United States