Midwestern Senators Introduce Alternative To Cutting Ethanol Subsidies

WASHINGTON -- A bipartisan group of Midwestern senators introduced a bill Tuesday as an alternative to Sen. Tom Coburn's (R-Okla.) proposal to end the current ethanol blender's tax credit and eliminate tariffs on foreign ethanol.

The bipartisan bill, S. 1185, would replace a 45-cent-per-gallon tax credit on ethanol-gasoline blend set to expire at the year's end with a new variable subsidy that fluctuates with the price of crude oil. Backers like Sen. Richard Lugar (R-Ind.), one of 15 farm-state senators to support the bill, argue the proposal would keep oil companies from lowering their prices to beat out the competition from ethanol distributors.

"The proposal acts as a safety net to prevent OPEC from manipulating oil prices to kill-off their ethanol rival," said Lugar in a statement. "When oil prices are high, as they are today, corn-based ethanol would not receive subsidy payments."

Amy Klobuchar (D-Minn.), who cosponsored the legislation with John Thune (R-S.D.), said it would help the country transition to a more sustainable incentives model for domestic renewable fuel production and reduce the nation's deficit by $1 billion.

"Our bipartisan legislation would provide businesses a clear glide-path to move forward and keep the biofuels industry competitive while reducing our debt by a billion dollars this year," said Klobuchar in a statement. "Homegrown energy has played an important part in reducing our dependence on foreign oil, combating rising gas prices and supporting thousands of jobs in Minnesota and throughout our nation."

Under the new proposal, ethanol blenders would receive a maximum of 30 cents per gallon if oil prices fall below $50 a barrel, and no subsidy at all if crude prices are at least $90 a barrel.

Proponents say the legislation, which preserves $6 billion in tax breaks for ethanol producers, will save $2.5 billion. In a nod to deficit hawks, $1 billion of those savings would go toward deficit reduction.

The bill was introduced just before Tuesday's cloture vote in the Senate that killed Sen. Tom Coburn's (R-Okla.) amendment to end ethanol subsides.

Comments

[Mustash]

12:54 PM on 06/24/2011

While subsidizing ethanol made from corn may not be a good idea I feel that cellulosic ethanol should be subsidized! The cellulosic process can use yard waste, construction waste, non-food crops like switch grass or hemp, waste from crops like corn and rice, land fill items, etc…

Ethanol is important because we can use much of the infrastructure ( pipelines, storage structures, stations ) that already exist for gasoline.

[JShep]

03:43 PM on 06/16/2011

Did y'all not pick up the fact that the ethanol subsidy of 30 cents per gallon would go to the "ethanol blenders", not the ethanol producers. Do y'all not realize that the blenders are the oil companies?

[olerealist]

03:31 PM on 06/16/2011

I do not buy the argument of Sen. Tom Harkin, D-Iowa, that the repeal of the subsidies would create any significant unemployment. The workers whose jobs might terminate do not fit the profile of currently unemployed citizens.

But the repeal should not go in effect too abruptly. I would expect that a reasonable rather brief delay should be included so as to allow for adjustments to be made in the industry.

Congress members are prone to saying “reduce the fed deficit at all costs but NOT IN MY BACKYARD.”

[Matt Herren]

09:35 PM on 06/15/2011

Yes... because keeping oil companies from lowering their prices is something we must do at all costs....

[Marlyn]

08:04 PM on 06/15/2011

Say NO to ethanol.

[pewty]

07:09 PM on 06/16/2011

Say NO to your face.

[gtoya1331]

04:08 PM on 06/15/2011

can you say chickenshyt?

[BBackSoon]

01:56 PM on 06/15/2011

How about subsidizing something other than Corn for use with ethanol?

I seem to remember some types of grass that can be used and they produce more than one crop in a growing season.

[HeartT]

03:15 PM on 06/15/2011

Yes, how about subsidizing switch grass and other waste for ethonol. These are great sources. We have to come up with energy alternatives. The oil companies don't want that, however, and are trying to cut off ethonol subsidies. Before getting down with this notion, investigate and you'll learn that there are sources other than corn that can produce ethonol. And you will find out that oil is a finite resource. Hopefully, as part of an informed public, voters will realize that it makes economic sense to subsidize ethonol and other biofuel research and implementation rather than drill baby drill. Seems the Republicans are counting on the public remaining un-informed.

[BBackSoon]

03:53 PM on 06/15/2011

Yea, I got it.

And I put the switch grass forward off the top of my head, so I hope the tone that sounded like I didn't know what I was talking about was a misread on my part.

I am fully ready to head to alternatives, but the carrot on a string game the Big Oil companies play keep real alternative just out of reach. As soon as we get serious, they drop the price just long enough to break viable programs and then gig us again.

[French Toast]

09:23 PM on 06/15/2011

Know what's weird? Corn growers could still get ethanol subsidies. They could harvest the ears for food and the stalk is totally the right stuff for cellulosic ethanol.

[poppie0144]

01:40 PM on 06/15/2011

they need to cut it completely off.all it does is cost us in every way use food for food.and les drill more oil and gas in this country.

[pewty]

07:13 PM on 06/16/2011

You are SO right!!! Oil and coal are the only answers. There is plenty for all and it will get cheaper in the future!!!! The Arabs are our friends!! And removing the tops off of those ugly mountains is good for the ecology......................................Youve got a mind like a beartrap.....rusted shut.

[wdfisher57]

01:27 PM on 06/15/2011

Follow the money people. Ethanol is 50% as efficient as oil therefore you have by twice the amount for the same bang. Thats not really saving us anything. You can see those corn states were all sharpening their knives at Coburns proposal. It never had a chance of passing, as corn prices are tripple what they were just 4 short years ago.

[journalisk]

01:00 PM on 06/15/2011

Oil poses an incredible state of affairs to our nation, and the world. We're talking about thousands of years of history and human evolution down the drain: environmentalists predict that we have less than fifty years before we're facing a definite hell on earth, and far less time to turn the situation around. Do you really expect us to allow a few greedy rich men to let all of our collective hard work go down the drain? BLACK GOLD is another form of corruption, and politicians who want to remove greener energy are clearly corrupt. It became a state of affairs during the age of industrialization; corruption was a state of affairs when it brought down Rome's agrarian state: as we move into the global informational age, it is imperative that we solve these riddles from the past immediately, and learn about right government and our symbiotic relationship with the earth, before we've destroyed our chances to enjoy both and move into the next age.

[mioffe]

12:24 PM on 06/15/2011

To grow corn we need time. Price for oil is changing everyday.

Why we need subsidize ethanol-disaster as for economy, as for environment, if even Al Gore admit it was his mistake for political reason?

[moneyman1]

01:13 PM on 06/15/2011

Corn is food not fuel. Time to move beyound corn to cellulosic ethanol from the cellulose in wood fibers. The technology exists now and some pioneers say the best source is available in the effluent stream from wastewater treatment plants ( as in your local sewage outfall filter ) . This method would help lower the cost of waste water treatment because the cellulose gathered from the filtration would become quite valuable as the feedstock for a cellulosic ethanol fuel plant - where is Obama on this one - oh that's right he's getting relected and needs Oil/Gas money to run for president of the rich class in America - vote the slug out along with all the incumbent congress if you want real change.

[pewty]

07:14 PM on 06/16/2011

Check out this company......Joules Unlimited.........

[doubleB]

12:19 PM on 06/15/2011

As much as I hate corn-based ethanol and the environmental destruction it causes, this is an interesting idea. Price uncertainty is a huge problem, is is probably one of the reasons we've gone 3 decades since our first oil crisis without transitioning. The thing is, they need to apply this concept to batteries though... i.e. something that can eventually do some good and help the environment. Unlike corn-based ethanol, which is a complete and total friggin boondoggle.

[moneyman1]

01:16 PM on 06/15/2011

Corn is food - people are starving around the world. Producing fuel for any purpose from corn is immoral. Time to move to cellulosic ethanol. Alcohol fuel from wood fiber. Look up Q-teros and see what they are working on - no wasted resources with their process.

[doubleB]

04:02 PM on 06/15/2011

Brilliant... let's get rid of person's "pet" technology, and subsidize someone else's. We shouldn't be subsidizing anything at all... we should be focusing on (i.e. taxing) the problem, not creating more. If anything should be subsidized... and that's a big IF, it should be batteries, which enable people to chose where they get their energy. That way we don't lock ourselves into something that may or may not be green.

[mdlawyer2]

06:54 PM on 06/15/2011

Corn as food pays less than corn as fuel. As with just about all problems, it's all about the money.

[CCverve]

12:02 PM on 06/15/2011

Foodstock Subsidies? That sounds like a Socialism don't it!! This is a tough one for you (R) boys to spin

[Rex River]

11:55 AM on 06/15/2011

A VOTE FOR A DEMOCRAT IS A VOTE FOR $10 GAS and $10 CORN PRICES...

[fishboy786]

09:59 PM on 06/15/2011

yea your right REX we need more Rep. so they can vote thereself more raises more health care for them and take away S.S. Medcare and put us more in debt. It was Bush and his pals that put in is mess with credit /default swaps sendin moneyto Iraq( so much that they didnot count it but weight it{put a 100 bill in your hand they sent 360 TONS of it and now say they don't know where it went}) yea we need 8 more yrs of that

[Sophiedo]

01:05 PM on 06/16/2011

A VOTE FOR REPUBLICANS IS A VOTE FOR MEDICARE VOUCHERS ($15,000 LAST I HEARD), SOCIAL SECURITY IS AT STAKE, PLANNED PARENTHOOD DENIED FUNDS, ENERGY TECHNOLOGIES DOWN THE DRAIN, UNIONS BUSTED WHILE CORPORATIONS "personhood" PROMOTED, WARS THRU LIES AND DECEPTIONS, STIMULUS CHECKS WRITTEN WITHOUT OVERSIGHT, CHEATING WITH TAXPAYER DOLLARS WITH THEIR 'other wives", AND GAS FOR $10 AND $10 CORN PRICES! Just in case you're hard of hearing.

[Rex River]

11:54 AM on 06/15/2011

AMY KLOBUCHAR and all the MIDWEST SENATORS want AMERICANS TO STARVE and to PAY FOR HIGHER FOOD COSTS...VOTE THOSE BUMS OUT OF OFFICE....