July 15, 2010
Ethanol group backs shift, phaseout US biofuel aid
Published in Reuters
WASHINGTON July 15 (Reuters) - A group of ethanol makers on Thursday proposed a phase-out of U.S. ethanol subsidies worth $6 billion a year if some of the aid is used in the interim to install "blender" pumps and build biofuel pipelines.
The group, Growth Energy, also asked that automakers be required to build flexible-fuel vehicles that can use gasoline containing up to 85 percent ethanol. The commonly sold blend is 10 percent.
"Here is a blueprint that helps the nation," said Tom Buis, president of Growth Energy, a trade group that produces 30 percent of U.S. ethanol. Members include POET, the No. 1 maker.
The group described its plan as a complete redirection of ethanol supports.
U.S. support for ethanol, popular in the Farm Belt as a home-grown fuel, may be at a turning point. Congress has been unable to extend the less-costly biodiesel tax credit, and major ethanol incentives expire at the end of this year.
Senate Energy Committee chairman John Bingaman said on Wednesday the high cost of incentives "should prompt Congress to critically examine whether it is appropriate to extend" the 45-cent a gallon tax credit for ethanol. Backers have proposed a five-year extension at a cost of more than $30 billion.
Growth Energy outlined its plan as Democratic leaders in the Senate sought consensus on a long-term energy bill.
Under the plan, it said, ethanol supports would be phased out when blender pumps -- which allow consumers to choose higher ethanol-gasoline blends when they fill their tanks -- blanket the nation and more than 100 million flex-fuel vehicles are on the road.
Growth Energy did not set a target date.
It proposed that money now spent on the 45-cent tax credit be converted to a tax credit to install 200,000 blender pumps. It also called for loan guarantees for construction of ethanol pipelines and a producer tax credit that would replace the current credit which goes to blenders who mix ethanol with gasoline.
The blender-pump credit ...
