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Obama Proposes Tax Credit for Building E85 Ethanol Fueling Stations

Location: Washington, DC

Obama Proposes Tax Credit for Building E85 Ethanol Fueling Stations
Tuesday, April 19, 2005

Washington Contact: Robert Gibbs or Tommy Vietor, (202) 228-5511
Illinois Contact: Julian Green, (312) 886-3506
Date: April 18, 2005


SPRINGFIELD - U.S. Senator Barack Obama (D-IL) today announced legislation to provide a tax credit to build E85 ethanol fueling stations throughout the country. This proposal would encourage the use of more ethanol, provide motorists who drive Flexible Fuel Vehicles with a cheaper gas, and help reduce our nation's dependence on foreign oil.

"For too long our country has relied too heavily on foreign oil to fuel its energy needs, and American consumers are paying an increasingly heavy price for their lawmakers' inability to address this problem," said Obama. "If you turn on the news, you can see that our dependence on foreign oil is keeping us tied to one of the most dangerous and unstable regions in the world. And if you pull into most service stations around the country and want to fill up your tank, you will pay some of the highest gas prices of all time," said Obama.

The legislation would provide a 50 percent tax credit for the cost of building a new E85 vehicle refueling facility, up to $30,000. The tax credit is paid for by using funds from penalties assessed by the National Highway Safety Administration on auto manufacturers that violate fuel mileage standards.

E85 is a blended fuel that contains 85 percent ethanol and 15 percent gasoline. E85, a clean burning renewable fuel made from corn, can be used in Flexible Fuel Vehicles (FFVs,) which can also use unleaded fuel when E85 isn't available. Standard vehicles can burn fuel with a 10 percent ethanol mix. Increased access to E85 fuel will benefit consumers right now because E85 is as much as 50 cents cheaper per gallon than unleaded gasoline.

There are currently 3.5 million FFVs on the road throughout the United States and 100,000 in Illinois. Vehicle manufacturers are expected to expand production of Flexible Fuel Vehicles when more fueling stations offer E85.

Nationwide, while there are more than 180,000 gas stations all over America, there are only about 400 E85 stations. In Illinois, there are approximately 20 gas stations that have the capability of offering E85.

"There are already millions of cars on the road that can run on E85 fuel, known as 'flexible-fuel vehicles,' and the auto industry is turning out hundreds of thousands more of them every year," Obama said. "Our problem is that we're in short supply of E85 stations like this Qik-n-EZ.

"We've talked for too long about energy independence in this country," Obama added. "E85 gives us an opportunity to actually get something done about it."

Obama also praised Governor Rod Blagojevich's leadership in providing state tax incentives to encourage E85 use.

"We should all be proud of Governor Blagojevich for leading the way on E85 here in Illinois," Obama noted. "It is time for the Federal government to join this important cause -- not only for our farmers, our ethanol producers and our environment, but to restore our country's control of its energy future."

Senator Obama held his press conference at the Qik-n-EZ Gas Station in Springfield, which carries E85 fuel.

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