Senate votes in favor of ending VEETC

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The Senate yesterday voted in favor of ending the ethanol tax incentives including the Volumetric Ethanol Excise Tax (VEETC) and funding for blender pump infrastructure.

The American Coalition for Ethanol (ACE), National Corn Growers Association (NCGA), Renewable Fuels Association (RFA) and others criticized this move by the Senate.

NCGA President Bart Schott, a grower from Kulm, N.D., said, “Sen. Feinstein has unfairly hit at the heart of an important agricultural industry while remaining unified with subsidy-laden Big Oil.”

Schott pointed out that one comprehensive report found that subsidies for the oil industry total up to $280 billion annually, representing up to $2 per gallon of gasoline. A recent legislative effort to eliminate $2 billion of these oil subsidies went nowhere in Congress, he noted, after organizations like the National Taxpayers Union painted it as a tax increase.

The ethanol industry supports more than 400,000 U.S. jobs, contributing more than $56 billion each year to the nation’s economy and $11 billion in federal, state and local tax revenue, Schott said.

“Last year, 81 senators voted to extend the blender’s credit for one year to allow us to move forward with a proposal to reform these incentives,” Schott said. “We have proposed such legislation and have shown a willingness to work with all parties on a solution, and we thank the senators who stood by their vote last year and stood by us in this week’s effort.”

However, ACE Executive Vice President Brian Jennings said  votes are symbolic and will not become law.

“While today’s votes have no chance of becoming law, because they are part of an underlying bill that is unconstitutional and dead-on-arrival in the House of Representatives, they nonetheless are disappointing.  If the amendments were to be enacted, they would raise gas prices and fuel taxes on American consumers, jeopardize U.S. jobs, put advanced biofuels in grave danger, and limit consumer fuel choice,” Jennings said.

“Ironically nearly one month ago, the U.S. Senate voted to protect the nearly $4 billion dollars Big Oil receives in tax subsidies,” Jennings said.  “We are disappointed senators are willing to reward Big Oil for shamelessly hoarding subsidies, but are willing to penalize the biofuels industry, especially when we’ve voluntarily offered to sacrifice part of the existing tax credit for deficit reduction.”

Jennings says the amendments do nothing to distract the biofuels industry from charging forward with reform of ethanol tax incentives in Congress.

Also Thursday, in a victory for corn growers and the ethanol industry, the Senate rejected a proposed amendment by Sen. John McCain that would have prevented the U.S. Department of Agriculture from providing grants for blender pumps.

“This is good news because we want to do all we can to encourage fuel choice,” Schott said. “Blender pumps provide options for those with flex-fuel vehicles and can help the ethanol industry grow in the years to come.”

“The biofuels industry has already proposed to end the blenders’ credit (or VEETC) by July 1, sacrificing it for deficit reduction, next-generation biofuels, and consumer fuel choice.  We will continue to work in a proactive and responsible way to achieve this reform through S. 1185, the Ethanol Reform and Deficit Reduction Act sponsored by Senators Thune (R-SD), Klobuchar (D-MN) and others.  We are confident this reform effort will move forward in Congress and be part of legislation that actually stands a chance of making it to the president’s desk,” Jennings said.

But, the National Wildlife Federation (NWF) praised the action by the Senate. Julie Sibbing, director of agriculture programs for the NWF, said they are pleased that the action will end wasteful and damaging ethanol subsidies.

Source: NCGA, ACE, NWF

 

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