Feinstein Statement on Ethanol Agreement

Press Release

Senator Dianne Feinstein (D-Calif.) has reached an agreement with Senators Amy Klobuchar (D-Minn.) and John Thune (R-S.D.) to repeal the nearly $6-billion-a-year ethanol subsidy and end the tariff on foreign ethanol by the end of this month. The agreement will reduce the federal deficit by $1.33 billion and invest $668 million in new technologies to reduce U.S. dependence on oil.

"This agreement is the best chance to repeal the ethanol subsidy, and it's the best chance to achieve real deficit reduction. Absent this agreement, taxpayers stand to lose $1.33 billion--that was the bottom line for me," said Senator Feinstein.

"Every month that passes without repeal costs taxpayers $400 million. After years of fighting, there is simply no guarantee a full repeal would be signed into law.

"I believe this bipartisan agreement should be included in the deficit reduction package that will likely accompany a vote on raising the debt limit, and I hope the president will consider that approach."

Under the agreement outlined in a letter to Majority Leader Harry Reid and Minority Leader Mitch McConnell sent Thursday morning:

The 45-cent-per-gallon ethanol blender credit (VEETC) will be repealed on July 31, saving $2 billion through the remainder of 2011.
The 54-cent-per-gallon tariff on ethanol imports will also expire on July 31.
The tax credit for cellulosic biofuel production, currently set to expire at the end of 2012, will be extended for three years, with annual caps on gallons, and will be expanded to include promising fuels from algae. This will allow the non-corn advanced biofuels industry-- the cleanest form of vehicle fuel--to emerge and develop.
Reduced tax credits for alternative fueling infrastructure, including electricity charging stations and natural gas fueling stations, will be extended through 2014. The small-producer tax credit will expire at the end of 2012, with a reduction in the per-gallon credit.

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