WASHINGTON (Dow Jones)–U.S. lawmakers Thursday unveiled a bill to extend for five years tax credits for ethanol production and a tariff to protect U.S. producers from imports, which are scheduled to expire at the end of this year.
Refiners produced about 10.6 billion gallons of corn-based ethanol in 2009 and the government paid out roughly $4.8 billion in tax credits to the companies that blend ethanol into gasoline.
Reps. Earl Pomeroy (D., N.D.) and John Shimkus (R-Ill.) said credits and tariff are still necessary, though, to protect the industry that helps the U.S. lessen its dependence on imported oil.
The bill would extend the 45-cents-per-gallon tax credit for corn-based ethanol and the 54-cents-per-gallon tariff on imported ethanol. The tariff primarily protects U.S. producers from the threat of sugarcane-based ethanol from Brazil, said Chris Thorne, spokesman for Growth Energy, a group representing U.S. ethanol producers.
Bob Stallman, president of the American Farm Bureau Federation said the tax credits and tariff provide the stability needed for the industry to prosper.
And, Stallman said, the government support will “foster expanded markets for corn and other agricultural crops used to make ethanol, increased earnings for farmers and the funneling of more resources into cash-strapped rural economies.”
The House bill unveiled Thursday already has 29 sponsors, including Shimkus and Pomeroy.
But there are also plenty of lawmakers in Congress and farm groups who oppose the ethanol subsidies. Livestock producers who depend on corn to feed their animals have complained over the years that ethanol subsidies make corn more expensive by diverting it to fuel, pushing up the costs of producing meat.
– By Bill Tomson, Dow Jones Newswires; 202-646-0088; bill.tomson@dowjones.com
