Senators struggle to find home for VEETC repeal package

By Kris Bevill | July 28, 2011

It’s been 21 days since Sens. Amy Klobuchar, D-Minn., John Thune, R-S.D., and Dianne Feinstein, D-Calif., announced their money-saving measure to modify ethanol support programs and requested Majority Leader Harry Reid’s help in getting a vote on the agreement before the August recess. But with Congress deadlocked over the looming debt ceiling deadline, it appears less and less likely that action will be taken on ethanol-related legislation any time soon. Klobuchar said recently the trio is now “desperately trying to figure out if there’s a vehicle” for the ethanol reform package.

“The obvious vehicle is the debt reduction package and so we are trying to get it on there and work with leadership on both sides and work with the White House to do this,” Klobuchar said at the U.S. DOE Biomass Program’s annual conference on July 27. She indicated that the debt package may be the only chance to get a vote from Congress on the ethanol-related measures. “If we don’t get this done, what do you think is going to happen? The public is going to lose $1.3 billion because there’s no revenue bill right now to put it on.”

The Thune-Klobuchar-Feinstein agreement would eliminate the current 45-cent-per-gallon Volumetric Ethanol Excise Tax Credit at the end of August, a move that would save taxpayers $400 million a month, according to Klobuchar. The package also repeals the 54-cent-per-gallon ethanol import tariff and includes a multi-year extension of the $1.01-per-gallon cellulosic biofuel production credit and the credit for alternative fuel infrastructure. The small producer credit is also extended, but for just one year and at a reduced rate. Klobuchar said she is confident the package will pass the Senate if and when senators have a chance to vote on it. “People understand the potential for cellulosic so we’ve done something pretty smart here,” she said, adding, “I do think that we are now moving to the next stage of biofuels. But people need to realize that biofuels are now 10 percent of our fuel supply. This isn’t just some little boutique thing on the side.”

Klobuchar told conference attendees that recent mixed messages from Congress on ethanol reflect an attitude of concern over finances, not biofuels. “One of the things that’s been most interesting for me this year has been the change in attitude about ethanol and about biofuels,” she said. “For many, many years there was strong Congressional support. Understandably, with difficult budget times and with the fact that ethanol has now come into its own, there is waning support; I wouldn’t say necessarily for the fuel itself, but for the subsidies.”