Ethanol advocates Wednesday pleaded their case for an extension of the US blender tax credit and import tariff, a day after another group of legislators called an extension "fiscally indefensible."
The 45 cent/gal ethanol blender tax credit, which effects demand for that product, expires at year-end. The 54 cents/gal import tariff, which works against competing supply from Brazil, will also expire.
A war of words over the expiries has been raging since Congress returned for a lame-duck session. This week, groups of legislators took sides for and against the extension in letters to Senate Majority Leader Harry Reid, Democrat-Nevada, and Minority Leader Mitch McConnell, Republican-Kentucky.
On Wednesday, Senators Chuck Grassley, Republican-Iowa, and Kent Conrad, Democrat-North Dakota, said an expiry of the blender credit, known as the volumetric ethanol excise tax credit, could result in a loss of more than 100,000 jobs and cut ethanol production by almost 40%. Thirteen other senators signed that letter.
On Tuesday, US Senators Dianne Feinstein, Democrat-California, and Jon Kyl, Republican-Arizona, sent a letter against the extensions that was signed by 15 other senators. "These provisions are fiscally irresponsible and environmentally unwise..," they said.
"If the current subsidy is extended for five years, the Federal Treasury would pay oil companies at least $31 billion to use 69 billion gallons of corn ethanol that the Federal Renewable Fuels Standard already requires them to use," Feinstein and Kyl said in the letter. "We cannot afford to pay industry for following the law."
Renewables groups have met with Obama administration officials backing a five-year plan where the blender credit would be extended for one year at a possibly reduced rate and then change to a domestic producer credit for four years. The ethanol import tariff would cease to exist once the producer tax credit starts.
The 45 cent/gal ethanol blender tax credit, which effects demand for that product, expires at year-end. The 54 cents/gal import tariff, which works against competing supply from Brazil, will also expire.
A war of words over the expiries has been raging since Congress returned for a lame-duck session. This week, groups of legislators took sides for and against the extension in letters to Senate Majority Leader Harry Reid, Democrat-Nevada, and Minority Leader Mitch McConnell, Republican-Kentucky.
On Wednesday, Senators Chuck Grassley, Republican-Iowa, and Kent Conrad, Democrat-North Dakota, said an expiry of the blender credit, known as the volumetric ethanol excise tax credit, could result in a loss of more than 100,000 jobs and cut ethanol production by almost 40%. Thirteen other senators signed that letter.
On Tuesday, US Senators Dianne Feinstein, Democrat-California, and Jon Kyl, Republican-Arizona, sent a letter against the extensions that was signed by 15 other senators. "These provisions are fiscally irresponsible and environmentally unwise..," they said.
"If the current subsidy is extended for five years, the Federal Treasury would pay oil companies at least $31 billion to use 69 billion gallons of corn ethanol that the Federal Renewable Fuels Standard already requires them to use," Feinstein and Kyl said in the letter. "We cannot afford to pay industry for following the law."
Renewables groups have met with Obama administration officials backing a five-year plan where the blender credit would be extended for one year at a possibly reduced rate and then change to a domestic producer credit for four years. The ethanol import tariff would cease to exist once the producer tax credit starts.
