NCGA & RFA supports Thune, Klobuchar legislation to reform ethanol industry


The National Corn Growers Association & Renewable Fuels Association praised the introduction of a bipartisan bill that would transition and transform current ethanol policy to both address fiscal concerns as well as ensure the continued growth of and innovation in America’s ethanol industry. The bill, known as the Ethanol Reform and Deficit Reduction Act, was introduced by Senators John Thune (R-SD) and Amy Klobuchar (D-MN) and a bipartisan group of 9 Senate colleagues.

“NCGA greatly appreciates the work Senators Thune and Klobuchar have done to craft this importance piece of legislation,” NCGA President Bart Schott, a grower from Kulm, N.D., said. “This legislation will help provide certainty for the future and strengthen the ethanol industry over the next several years. During a time of economic uncertainty and record-high gas prices, this legislation will also protect thousands of jobs, which is of great importance to rural America.”

The bill would transition the current ethanol tax incentive, known as VEETC, to a variable tax incentive tied to the price of oil. Additionally, the bill would make available funds saved by the transformation of VEETC to expand ethanol fueling infrastructure by improving tax policies currently available for blender pumps and other ethanol-related infrastructure. Specifically, the bill calls for 53,000 blender pumps, a number the RFA noted was needed to help achieve the goals of the Renewable Fuels Standard.  The bill would also extend current tax incentives for the next generation of ethanol technologies using cellulosic and other feedstocks. If passed, the bill would take effect July 1, 2011. This bill is similar to legislation introduced by Senators Chuck Grassley (R-IA), who is a cosponsor of this bill, and Kent Conrad (D-ND).

“This is thoughtful, responsible legislation that addresses the need for sound budget policy with progressive and innovative strategies for creating jobs and ending America’s addiction to imported oil,” said RFA President and CEO Bob Dinneen. “This bipartisan, forward-looking approach stands in stark contrast to other Senate gimmicks that would seek to end America’s efforts to replace imported oil with domestically-produced renewable fuels like ethanol. America’s entire ethanol industry stands in support of this effort and is proud to work with these Senate leaders to proactively offer responsible reform ideas and seek to see this bill become law through following the proper legislative process.”

Original cosponsors of the bill include: Senators Grassley, Tom Harkin (D-IA), Mike Johanns (R-NE), Ben Nelson (D-NE), Richard Lugar (R-IN), Tim Johnson (D-SD), John Hoeven (R-ND), Al Franken (D-MN), and Jerry Moran (R-KS).

The RFA also points out that this substantive effort varies greatly from the political gamesmanship and legislative shenanigans that defines the crusade of oil-patch senators to end America’s efforts to develop renewable alternatives to imported oil.

“The Ethanol Reform and Deficit Reduction Act comes at a time when we are proactively trying to reform the ethanol industry, unlike the oil and gas industry,” Schott said. “NCGA supports this legislation and will continue to look for ways to reform. We look forward to working with our Allies in the Senate to ensure passage.”