Saying that ethanol offers the most effective alternative to foreign oil and supports hundreds of thousands of jobs in the United States, Senators Chuck Grassley and Kent Conrad have gathered signatures for a letter to Senate leaders urging action this year on legislation to extend renewable fuel tax and tariff provisions.
The senators said immediate action is warranted to "provide stability and certainty for producers and consumers of renewable fuels."
"Ethanol has proven its value as a homegrown, renewable fuel and, in light of the hundreds of billions of dollars shipped abroad as a result of foreign oil dependence, ethanol is a relative bargain," Grassley said.
"Our country is spending over $730 million a day on imported petroleum this year, money that often ended up in the hands of unstable or unfriendly governments," Conrad said. "This is not the time to reduce the supply of a domestic source of fuel and place at greater risk the thousands of well-paying jobs that the renewable fuels industry has created."
The senators said that ethanol is the only renewable fuel that is substantially working to reduce U.S. dependence on oil. Domestically produced ethanol displaces millions of barrels of imported oil every year from Saudi Arabia, Venezuela and Nigeria and now accounts for almost 10 percent of the U.S. fuel supply.
Last April, Conrad and Grassley introduced a bill to extend, through 2015, the volumetric ethanol excise tax credit, or VEETC, which is also known as the blenders’ credit; the small ethanol producer tax credit; the cellulosic producer tax credit; and the ethanol import tariff.
Ethanol is good for rural economies, and a recent study found that the failure to extend the VEETC credit and the secondary tariff would result in the loss of more than 100,000 jobs nationwide and reduce ethanol production by nearly 40 percent.
The lapse of the separate tax credit for biodiesel, which expired at the end of 2009, has cost nearly 23,000 jobs. "We can't risk a repeat performance with ethanol, where 112,000 jobs are at stake," Grassley said. Of the ethanol tariff, he said, "the United States already provides generous duty-free access to imported ethanol under the Caribbean Basin Initiative, but the CBI cap has never once been fulfilled. In fact, last year, only 25 percent of it was even used by Brazil and other countries."
Grassley and Conrad are longtime advocates for tax incentives for biofuels such as ethanol and biodiesel. Grassley is Ranking Member of the tax-writing Finance Committee. Conrad is a senior member of the Finance Committee and Chairman of the Senate Budget Committee. Grassley is a senior member of the Budget Committee.