Senators praised after voting down an amendment to repeal ethanol tax incentives

The National Corn Growers Association (NCGA), American Coalition for Ethanol (ACE) and Renewable Fuels Association (RFA) yesterday afternoon praised the U.S. Senate for voting down an amendment by Senator Coburn (R-OK) to repeal ethanol tax incentives, including the Volumetric Ethanol Excise Tax Credit (VEETC) or the “blenders’ credit” by a vote of 59 to 40.

ACE Executive Director Brian Jennings said the vote sends the right message to the American public.

“This vote is a major victory for the biofuels industry and American consumers and a setback for those clinging to our status-quo dependence on oil.  It proves political stunts aimed at ethanol won’t be tolerated in the U.S. Senate.  Now we can focus on continuing our work with the White House and both chambers of Congress to support meaningful and responsible legislation to reform ethanol policy, such as S. 1185, the Ethanol Reform and Deficit Reduction Act, introduced by Senators Thune, Klobuchar, and many others this week,” Jennings said.

If Senator Coburn’s efforts had been successful, the ethanol industry could have seen production reduced by as much as 38 percent. This would have significantly impacted an industry that provides and supports more than 400,000 U.S. jobs, many in rural America, during a time of economic uncertainty. The loss in ethanol production could have resulted in the shedding of approximately 112,000 of these jobs, in all sectors of the economy.

“We greatly appreciate the strong message senators sent Sen. Coburn today by showing him they understand the importance of the ethanol industry to rural America,” NCGA President Bart Schott, a grower from Kulm, N.D., said. “This demonstrates the Senate’s lack of desire to engage in destructive policy making, especially to an industry that supports hundreds of thousands of jobs in America during a time of economic uncertainty. We also thank our many growers and supporters who called and emailed their senators about this important vote.”

“The ethanol industry has been proactive in our efforts to reform, unlike the oil and gas industry,” Schott said. “NCGA supports alternative reform options that will provide a safety net to the industry while reducing the overall cost to the federal government. We hope Congress will focus on policy initiatives such as the Ethanol Reform and Deficit Reduction Act that was introduced yesterday by Sens. John Thune and Amy Klobuchar. NCGA and its partners in the ethanol industry look forward to working constructively with Congress towards reform.”

The RFA supports the Ethanol Reform and Deficit Reduction Act offered by Senators John Thune (R-SD) and Amy Klobuchar (D-MN).  Under this proposal, the current ethanol tax incentive, known as VEETC, would transition 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).

Sources: NCGA, ACE, RFA