Ethanol loses powerful ally in budget battle

Ethanol is taking a back seat to the budget for Senator Chuck Grassley (R-Iowa), a long-term ethanol-industry backer. Sen. Grassley said he would vote for a deficit-cutting bill, even if it included provisions intended to stifle growth in the ethanol industry.
"As significant as it is to me because I'm a great ethanol fan, if in fact those things were in the bill to cut the deficit ... I'd have to bite the bullet," Grassley said.

According to the Des Moines Register, the House-approved bill would cut federal spending by $60 billion this year. Measures include
1) Blocking the Environmental Protection Agency (EPA) approval of E-15 gasoline
2) Barring subsidies for retrofitting service stations to sell higher amounts of ethanol

In the House of Representatives, nearly 80 Democrats joined more than 200 Republicans in voting for the measure.

Tom Buis, CEO of Growth Energy said the votes show that the industry is losing some of its congressional clout. He blamed the defeats on a campaign by ethanol opponents to blame biofuels for higher food prices.

"That type of stuff sticks and once it sticks, it's hard to get it out of people's minds," Buis said.

Ethanol opponents include food companies, livestock producers, the oil industry and automakers. Former President Bill Clinton warned producers at the 2011 Agriculture Outlook Forum that using too much corn for ethanol will lead to higher food prices and riots of poor countries.

Although the spending bill passed the Republican-controlled House, the Democrat-controlled Senate is unlikely to pass it as-is.

source: cattlenetwork