Ethanol Hot Topic in 2012 Campaign

US ethanol is under attack both on Capitol Hill and on the campaign trail. Several measures have been introduced into the US Senate that would stop the growth of the ethanol industry dead in its tracks. Sen. Tom Coburn (R-OK) went to the floor Thursday night with an amendment to eliminate the Volumetric Ethanol Excise Tax Credit (VEETC) immediately; while, at the same time, Sen. John McCain (R-AZ) is proposing to eliminate funding of ethanol infrastructure.

Meanwhile, several GOP presidential hopefuls have also turned their backs on America’s renewable fuel industry. Rick Tolman, CEO of the National Corn Growers Association, told HAT that ethanol is going to be an issue in the 2012 campaign, “It is a real flash point in the campaign.” Tolman said he was disappointed with some of the candidates that have come out against ethanol while other have supported the renewable fuel, “We are pleased with Mitt Romney and Tim Pawlenty who see ethanol as part of the energy solution.”

At the center of the issue is the ethanol tax credit. Tolman said the ethanol industry has no problem with taking away the tax credit as long as they have access to the US fuel market, “Give us market access; we want to have consumers choose.” He said flex-fuel cars and blender pumps give consumers that choice. The ethanol industry wants the funds from the tax credit to put into building out the infrastructure for ethanol, that is, putting in more flex-fuel and E-85 fuel pumps.

As the campaign moves forward and gas prices continue to go up, more and more voters will be demanding that something be done to address the nation's energy crisis, warns Tolman. He feels the energy issue will become a major issue in the upcoming presidential debate. Tolman says that, right now, ethanol and domestic oil are the only alternatives to imported oil and that policy is needed to help both these sources grow to provide Americans with a lower priced and homegrown fuel supply.

Meanwhile, the Senate is moving toward a critical vote on Tuesday over ethanol. The US Senate is scheduled to vote on an amendment that would eliminate a credit for ethanol blenders as well as a tariff on imported ethanol by July 1.The amendment is being offered by Senator Tom Coburn (R-OK), who earlier in 2011 introduced a bill to eliminate the 45 cent/gallon volumetric ethanol excise tax credit (VEETC) as well as the 54 cent/gallon tariff on imported ethanol. The VEETC credit goes to blenders who mix ethanol with gasoline and is estimated to be worth about $6 billion/year. The tariff is designed to eliminate any advantage that ethanol from countries such as Brazil might enjoy from the VEETC.

The American Coalition for Ethanol (ACE) has announced its strong opposition to Coburn’s amendment to repeal the ethanol tax incentives including the Volumetric Ethanol Excise Tax Credit (VEETC) or the “blenders credit.” ACE Executive Director Brian Jennings says Senator Coburn is putting Big Oil politics ahead of the best interests of the country. “During this difficult economic time for many Americans, Senator Coburn, who according to opensecrets.org received $250,000 in campaign contributions from oil and gas companies since 2005, is doing the bidding of Big Oil to effectively raise fuel prices on consumers, put the 400,000 jobs supported by the American ethanol in jeopardy, and make the U.S. more dependent on expensive foreign oil.

The ethanol industry is supporting a bipartisan effort to reform and improve ethanol tax incentives, but Senator Coburn’s amendment would hijack this reform process supported by many Republicans and Democrats in Congress,” Jennings said.

“ACE members encourage Senators to vote against the Coburn amendment and support our effort to reform VEETC, promote next-generation biofuels and provide consumers with fuel choice. We also urge Congress to recognize that budget cuts shouldn’t disproportionately discriminate against American ethanol while leaving taxpayers on the hook for hundreds of billions of dollars of subsidies for oil companies,” Jennings stated.

SOURCE: hoosieragtoday