Ethanol producers in Brazil, U.S. in ad war over incentives

Washington, D.C. - The U.S. and Brazilian ethanol industries are launching competing ad campaigns as they prepare for a fight in Congress over the future of U.S. incentives for the biofuel.

U.S. producers have the better-funded and most ambitious campaign.

Growth Energy, a Washington-based trade group, is spending $2.5 million promoting U.S. ethanol in brief spots that will run for the next six months on cable television news shows.

The group wants viewers to see supporting ethanol as the patriotic thing to do: The theme of its ad campaign is "America's Fuel." The spots carry the message that ethanol doesn't have the national security or environmental issues that petroleum does and "has not shipped a job overseas."

"Domestic ethanol creates jobs. That's what this is about," said Jim Nussle, a former Iowa congressman who is on the board of Growth Energy.

Iowa is the No. 1 U.S. producer of ethanol. The state had about 1,300 jobs in ethanol production in 2008.

The Brazilian industry trade group, UNICA, has started running ads in Capitol Hill publications and is paying for a spot on a Washington public radio station over the next two weeks.

There also will be online ads targeted to ethanol-related searches.

Growth Energy wants to extend the 45-cent-per-gallon tax subsidy for ethanol as well as a 54-cent-per-gallon tariff on imported ethanol. Both are set to expire this year. A bill pending in the House would extend both measures for five years.

Growth Energy also looks to use a pending climate bill to make some key changes in the nation's biofuel mandates to create a bigger market for corn ethanol, said Tom Buis, the group's chief executive. Under provisions the group seeks, corn ethanol would qualify as an "advanced biofuel" and could be used by refiners toward meeting the mandate for that type of fuel. Brazilian ethanol already qualifies as an advanced biofuel because it is more energy efficient to produce.

The Brazilian industry is billing its sugar cane product as the "Sweeter alternative."

Brazil ended its tariff on ethanol imported from other countries last week, and its wants the United States to do the same. Since Brazilian ethanol is cheaper than U.S. corn ethanol and already qualifies as an "advanced biofuel," eliminating the tariff would give U.S. refiners a significant new incentive to use the product.

"Our message and our point here is that cane ethanol is a clean, renewable fuel that can help Americans save at the pump, cut the dependence on foreign oil and also help the environment," said Joel Velasco, UNICA's chief North America representative.

His group's ads will cost less than one-tenth as much as Growth Energy's, he said. "We don't have the pockets to do television."

He said the advertising was already planned before he learned of Growth Energy's launch on Monday.

Nathanael Greene, who follows energy policy for the Natural Resources Defense Council, said counting corn ethanol as an advanced biofuel could discourage development of new products that won't be made from food crops.

"Blurring the lines and letting mature industries outcompete the developing ones doesn't help us," he said.

source: desmoinesregister