Senate Majority Leader Harry Reid, D-Nev., has received a letter from Senators John Thune, R-S.D., Amy Klobuchar, D-Minn., and Diane Feinstein, D-Calif., outlining an agreement that has been reached on renewable fuel incentives. Instead of expiring on Dec. 31, 2011, the 45 cent Volumetric Ethanol Excise Tax Credit, as well as the 54-cent per gallon tariff on ethanol imports would be eliminated on July 31, 2011. The bipartisan proposal is ready to be taken to the floor for debate by the full Senate.
The plan would use $1.3 billion of the savings from the agreement to reduce the debt and the remaining $668 million would be used to provide incentives for renewable fuels. Among those incentive is the extension of the Cellulosic Biofuel Production Tax through 2015, the Alternative Fueling Infrastructure Tax Credit through 2014, and the Small Producer Tax Credit through 2012.
Several industry groups have praised Senators Thune and Klobuchar for brokering this compromise.
"Senators Thune and Klobuchar worked tirelessly to help shape a compromise that will benefit all Americans," said Growth Energy CEO Tom Buis. "This proposal will benefit consumers at the pump, reduce our dependence on foreign oil by investing in next generation biofuels, and make a significant contribution to reducing our nation’s budget deficit.”
Brian Jennings, Executive Vice President of the American Coalition for Ethanol, says that despite its shortcomings, this compromise represents the art of the possible given the temperament of Congress and tries to make the best of a bad situation.
"There are many positive components of this compromise that are important to the ethanol industry and rural America," National Corn Growers Association President Bart Schott said. "The final compromise reflects both the importance of the ethanol industry to achieve energy independence and the need for fiscal responsibility. The ethanol industry continues to have a positive impact on all parts of America, and we are committed to working with Congress in the future on steps that can move the ethanol industry and the nation’s economy forward."
However Schott did say that they want Congress to level the playing field when it comes to energy policy. Unlike the oil and gas industries, ethanol has been proactively working to reform tax policy affecting the industry and secure a safety net while reducing the overall cost to the federal government.