Group asks Senate to consider biofuels bills while addressing oil spill, energy legislation

By Holly Jessen | June 10, 2010
Posted June 30, 2010

In a letter to Senate Majority Leader Harry Reid, three ethanol industry groups have asked that legislators keep biofuels in mind. "It is likely that the Senate will take up an energy bill, heavy on provisions that respond to the Gulf oil spill, and we're hopeful that it will also contain important provisions for biofuels," Brian Jennings, executive vice president of the American Coalition for Ethanol (ACE), told EPM. ACE is one of the three organizations that signed the letter. Also signing on were the National Corn Growers Association and Renewable Fuels Association.

The letter asked Reid to include two ethanol-related bills in the energy legislation. One, the Consumer Fuels and Vehicle Choice Act, a bill to increase the number of flex fuel vehicles and provide grants for installing blender pumps, which was introduced in the Senate last year. On June 30 U.S. Reps. Stephanie Herseth Sandlin (D-SD) and Adrian Smith (R-NE) introduced a companion bill in the House of Representatives. The second bill is the Green Jobs Act, which has been introduced in both the House and Senate, to extend ethanol tax incentives. "One important component of the domestic policy response to the Deepwater Horizon spill should be further efforts to promote the domestic production and use of renewable fuels like ethanol," the letter said.

If there were more FFVs and more blender pumps, as the Consumer Choice Act would ensure, more consumers would have access to blends higher than E10, breaking down the blend wall. It doesn't cost significantly more to build FFVs, and blender pumps cost are only slightly more than traditional fuel dispensers. In addition, the groups said, blender pumps can be installed over the next few years as pumps are being upgraded for more sophisticated card-reading abilities. "Thus, enacting this legislation will enable increasing levels of ethanol use in transportation fuels without posing a burden on auto manufacturers or retail fuel distributors," it said.

The Green Jobs Act would extend through 2015 income and excise tax credits for ethanol, and the cellulosic biofuel producer tax credit. The volumetric ethanol excise tax credit (VEETC), commonly called the blenders credit, provides blenders with 45 cents for each gallon of ethanol blended with gas, enhancing cost competitiveness and reducing prices at the pump. In addition, the legislation, if passed, would extend the secondary tariff on imported ethanol. "VEETC will also help ensure that American biofuels producers can maintain profitability and that American taxpayers are not forced to subsidize foreign ethanol imported into the United States," the letter said.