July 22, 2010
Ethanol backers push to increase motorists’ access
Published in Argus Leader
WASHINGTON - With Congress increasingly reluctant to extend the biofuels tax credit, some ethanol advocates were on Capitol Hill on Wednesday to urge lawmakers to focus their efforts on making it easier for Americans to use the corn-based fuel in their cars from one coast to the other.
"What's standing in our way is not supply, it's barriers to consumption," Wesley Clark told members of the Senate Agriculture, Nutrition and Forestry Committee.
Clark, retired Army general, is co-chairman of Growth Energy, a consortium that includes some of the industry's most prominent players including Sioux Falls-based Poet, the world's largest ethanol producer. The group last week called for a phase-out of the tax credit, provided the savings are redirected to pay for the installation of thousands of more pumps dispensing ethanol-blended gasoline, construction of new pipelines to transport the biofuel to population centers nationwide, and incentives for car makers to produce more vehicles that can run on the blended fuel.
Of the roughly 240 million vehicles on the roadways, only 8 million are flex-fuel vehicles that can take ethanol, according to Growth Energy. About 2,000 gas pumps, mostly in the Midwest, provide ethanol, and Clark told senators that his organization would like to see 50,000 to 200,000 more installed across the country with the help of federal aid.
The tax credit, which expires Dec. 31, gives ethanol blenders a 45-cent tax credit for each gallon produced and costs the federal treasury about $6 billion a year in lost revenues. But concerns about the mounting federal debt have imperiled many programs once thought to be safe, and the ethanol tax credit is one of them. The House Ways and Means Committee recently proposed cutting the subsidy to 36 cents per gallon and extending it for only a year, not the five years proposed by corn-state lawmakers.
Sen. Tim Johnson, D-S.D., said Wednesday that a long-term extension is "on shaky ground" though he'd like to pursue both strategies - infrastructure and tax assistance - to help the industry.
"It's a heavy lift," agreed Sen. John Thune, R-S.D., a proponent of the tax credit and a member of the Senate Republican leadership, which has pounded Democrats for driving the nation deeper into debt.
While he likes Growth Energy's approach to expand ethanol's infrastructure, Thune said it's too early to abandon the credit, especially when many of the farmers and blenders he represents want to keep it in place. Producers in other states also don't seem ready to budge on the credit, which the Congressional Budget Office projects would cost $70 billion during the next decade if it were extended at the current rate. The Renewable Fuels Association is wary about Growth Energy's proposal, saying a phase-out of the tax would mean the closure of ethanol plants and the loss of thousands of jobs.
"The .....
