Houghton-area ethanol supporter pumped about fuel's future

Randy Knecht believes in giving consumers choice — and having enough flexible-fuel vehicles and blender pumps would allow this. That's why the Houghton farmer traveled to Washington, D.C., on Monday and Tuesday to lobby for ethanol issues.

Knecht, a board member for the American Coalition for Ethanol, was among the roughly 30 people who took part in the Sioux Falls-based coalition's second annual "DC fly-in." The group, who met with about 60 members of Congress and their staff, asked for extension of the volumetric ethanol excise tax credit, known as the “blender’s credit”; extension of the small producer tax credit; and support for more flex-fuel vehicles and ethanol blender pumps.

A bill introduced in the U.S. House this week would extend the government incentives that support the ethanol industry. The 45-cent tax credit for blending the fuel into gasoline and the 54-cent tariff that dissuades competition from Brazilian imports would be extended for at least five years under a proposal by Reps. Earl Pomeroy, D-N.D., and John Shimkus, R-Ill.

Under the proposed bill, ethanol’s tax credit — which is set to expire on Dec. 31 — would be extended to Dec. 31, 2015, and the tariff to Jan. 1, 2016. The congressmen said the tax credit, given to refiners for each gallon of the fuel mixed with gasoline, generated $8.4 billion in revenue to the U.S., $3.4 billion more than it cost.

The economic incentive of the "blender’s credit" is usually passed on to consumers in the form of lower prices at the pump, according to an ethanol coalition press release. In the release, the coalition points to the tax credit’s benefits to consumers and to the jobs created by the ethanol industry as key reasons the credit should be extended.

“In today’s economy, the focus must be on creating jobs, and extending the federal ethanol tax credit will not only save thousands of American jobs, but it will allow new American jobs to be created as U.S. ethanol production and use continues to expand,” Brian Jennings, executive vice president of the coalition, the nation’s largest ethanol advocacy association, said in the release.

Knecht, who said the fly-in was very effective, said extension of the ethanol tax credit is extremely important. At some point, he said, if there are enough flex-fuel vehicles and blender pumps, he knows the choice most people would make. "I think the consumer would pick the American fuel over the foreign oil," he said.

source: farmforum