Zichal: White House supports VEETC extension

By Holly Jessen | September 23, 2010
Posted Oct. 4, 2010

The extension of the Volumetric Ethanol Excise Tax Credit came up at the annual gathering of the Renewable Fuels Association, held Sept. 30. Heather Zichal, U.S. President Barack Obama's deputy assistant for energy and climate change policy, spoke to the group about the administration's commitment to clean energy, and specifically, ethanol. "As you know, we support the extension of the ethanol tax credit and recognize how important the industry," she said.

As Obama has said before, Zichal pointed out that the U.S. has a choice when it comes to energy policy—action or inaction. It's a choice between the old ways or the new and between leading the global race or falling behind other countries. She also pointed out that about 95 percent of the fuel powering cars, trucks, planes and trains comes from oil. More than half of that oil comes from overseas, accounting for more than one-third of the carbon emissions in the U.S. "With statistics like that, there's no question that biofuels will continue to be a critical component of our energy policy - and along the way, it's going to reduce our dependence on foreign oil, create jobs, protect the environment, and invigorate rural economies," she said.

She also brought up the subject of tax credit reform. Although Zichal didn't mention the group by name, Growth Energy proposed its potentially game changing Fueling Freedom Plan this summer. It calls for some tax credit funds to be diverted to help pay for infrastructure such as blender pumps and pipelines.

Zichal said the White House does want to work with the ethanol industry and Congress with looking at options for reform. "We want to make sure that it's guided by a recognition that the existing program does work—we're certainly not looking to upend a program that works, as occasionally happens in Washington," she said. "We want to make sure that we are all on the same page as we move forward and have these discussions."

The ethanol industry has been playing the waiting game in recent weeks, with very little news about VEETC, commonly referred to as the blender's credit. The RFA recently told EPM the organization is continuing to work with lawmakers in an effort to get the extension passed before it expires at the end of the year. "We remain hopeful that an extension of VEETC will occur in the lame duck session of Congress in November," said Matt Hartwig, communications director. "We are also realistic that it's an uphill battle."

As it has said since summer, Growth Energy does support a multi-year extension of VEETC. The group feels strongly that its plan is the best way to go, but if that isn't implemented it doesn't want to see the tax credit lapse. "Because the VEETC plays such a crucial role in our energy independence, Growth Energy believes that the tax credit will pass in some form by the end of the year," Stephanie Dreyer, Growth Energy public affairs associate, told EPM.

The point, Dryer said, is that the ethanol industry needs the same kind of access to the market as Big Oil enjoys. "That is why we have proposed our Fueling Freedom Plan which will eliminate the barriers to the transportation fuels market by building out ethanol dispensing infrastructure in the form of 200,000 blender pumps, a federal loan guarantee for construction of ethanol pipelines and production of flex fuel vehicles," she said.