The end of another year is near and again the expiration of the Volumetric Ethanol Excise Tax Credit, or VEETC, is near. But this time there is no movement to extend the credit. In the age of deficit reduction work, it’s obvious that credit is on its way out.

Bob Dinneen of the Renewable Fuels Association gives credit to the ethanol industry for not trying to extend it.

“They recognize the economic situation that the country is facing, that the government is facing, and they know everybody has to do their part. We look at the situation and recognize that the marketplace has changed pretty fundamentally. You’re now looking at sustained $85-100 barrel oil, and quite frankly at that level it’s a little hard to ask the taxpayer to provide a gasoline marketer with an incentive to blend ethanol when the marketplace is already providing that incentive.”

Dinneen adds that policy has changed with the Renewable Fuels Standard that provides a demand base for the industry. But he says most importantly, the ethanol industry itself has changed.

“It’s not your grandfather’s ethanol industry anymore,” he told HAT. “We are more efficient. We’re utilizing new technologies. We’re looking to evolve to new feedstocks. So the whole world has changed, and we never wanted to be tied to the tax incentive forever.”

Dinneen hopes to soon see a more comprehensive dialogue about U.S. energy tax policy so petroleum industry credits also get reigned in.

“Why is it that ExxonMobil’s shareholders and lobbyists are hanging on to their tax incentives and their subsidies to their dying breath?”

Dinneen explains oil industry tax incentives are imbedded in the tax code and don’t face the consistent justification for renewal that VEETC has. Well funded PR campaigns have helped oil keep those incentives in place too.

source: hoosieragtoday


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