When Donald J. Trump talks about “America First,” he means putting the needs and desires of the American people ahead of global concerns. It’s an admirable goal, and he’s making it manifest throughout the marketplace.
This is especially true in the energy sector, where his adoption of the “drill baby, drill” attitude to energy exploration has already created a drop in the price at the pump. Things need to go further, beyond the exploration and exploitation of fossil fuels until the production of synthetics and biofuels are included.
For more than 20 years, taxpayers have financially supported the ethanol and biodiesel industries through generous tax subsidies.If it ever was, this is no longer something from which the American people derive benefits sufficient to justify the costs. It is an exercise in central economic planning that continues largely for the enrichment of multinational commodity giants and fuel exporters.
Consider Sustainable Aviation Fuel. The House Republican’s One Big Beautiful Bill expands by $45 billion the biofuel tax credit created by Joe Biden’s Inflation Reduction Act. It gives multinationals larger tax breaks for exporting “green” jet fuel to help meet European mandates than it does for supplying biodiesel and ethanol to American consumers. This ignores the U.S. consumers’ needs and puts foreign interests ahead of domestic ones. Nonetheless, some in Congress argue this will somehow boost America’s energy security and reduce our reliance on foreign oil.
That’s not the way it works out. It’s just another example of corporate welfare masquerading as a social and economic good. Companies that benefit most from the subsidies have the financial and logistical capacity to scale production quickly, optimize their operations to maximize tax credits, and exploit global markets that offer higher returns by, for example, utilizing the European Union’s sustainable aviation fuel mandates. Many of these multinationals are positioned to take advantage of trade loopholes that allow them to avoid tariffs on feedstocks imported from China. Small and mid-sized American farmers and biofuel cooperatives meanwhile struggle to compete, despite being the original intended beneficiaries of such subsidies.
These credits aren’t worth the cost. The 2024 Joint Tax Committee expenditures report projected that the IRA’s biofuel tax credit, known as section 45Z, would cost $8.4 billion over three years. This week the House voted to expand that to $45 billion and extend it by four years. It’s the only Biden green energy credit targeted to be bigger when it ought to be zero.
There probably isn’t the political will to bring a permanent end to the biofuels tax credit. It’s too important to too many powerful interests. Why not then enforce export limits on fuels produced with taxpayer assistance so that publicly funded benefits contribute to the nation’s energy needs and economic progress before being sent overseas. Ensuring taxpayer subsidized biofuel is only sourced, produced, and used in the U.S. would maximize the domestic economic and environmental benefits, increase domestic supplies, and reduce the cost of the credit to American taxpayers.
A Heritage Foundation report suggests additional tapping of our energy abundance would spur job growth and increase family incomes except that “Today, America’s position as a dominant producer of oil and gas is threatened by misguided government policies that have restricted oil and gas production on federal lands and federally controlled offshore areas and attempted to stifle oil and gas production on private land through overregulation.” These conditions prohibit Americans' potential to excel in the energy industry both at home and abroad.
In the first two hundred days of his new administration, President Trump has created new energy opportunities for us all. In February, the National Energy Dominance Council was established. The nation’s untapped energy resources are once again going to open to exploration. To further strengthen our energy future, let’s end the preferential treatment shown to corporations engaged in environmental virtue signaling at the expense of what America needs. Policies should reward those who invest in American infrastructure, innovation, and the workforce to lower costs, generate growth, and offer more options for American consumers.
It's time to put the country first. The Biden approach to “think globally” needs to be replaced with a resolve to “act locally.” If Congress won’t rein the biofuels credits and use the savings to lower the corporate rate to 15 percent to the benefit of all businesses, American taxpayers will be left less well off than they might be. Let’s lessen America’s involvement in multinational schemes that erode our domestic economic resilience.
