Grassley, Conrad Work to Extend Ethanol Tax Incentives
Will Build Energy Security and Create Jobs
WASHINGTON – Senators Chuck Grassley (R-IA) and Kent Conrad (D-ND) are urging the Senate to act on legislation they introduced today to strengthen America’s energy independence and create jobs through the production of domestically produced biofuels.
The bipartisan bill would extend, through 2015, the volumetric ethanol excise tax credit, or VEETC, which is also known as the blenders’ credit; the small ethanol producers tax credit; the cellulosic producers tax credit; and the ethanol import tariff.
The senators said that extension of these policies is the right thing to do because biofuels offer an alternative to foreign oil and generate economic activity in the United States. Today, ethanol comprises nearly 10 percent of the U.S. fuel supply. Ethanol produced in the Midwest replaces oil from Saudi Arabia, Venezuela and Nigeria. Ethanol is good for rural economies, and a recent study found that the failure to extend the VEETC credit and the secondary tariff would result in the loss of 112,000 jobs nationwide and reduce ethanol production by nearly 40 percent. Iowa would lose the most jobs at nearly 30,000.
Grassley said the lapse of the separate tax credit for biodiesel, which expired at the end of 2009, has cost 29,000 clean-energy jobs and put 23,000 more at risk. “We can’t risk a repeat performance with ethanol, where 112,000 jobs are at stake.” Of the ethanol tariff, Grassley said, “the United States already provides generous duty-free access to imported ethanol under the Caribbean Basin Initiative, but the CBI cap has never once been fulfilled. In fact, last year, only 25 percent of it was even used by Brazil and other countries.”
Conrad said, “Our country is in serious danger because of skyrocketing energy costs. This growing crisis demands urgent action. We must be committed to coming together in a bipartisan way to lessen our dependence on foreign oil, while aggressively pursuing alternative sources of energy such as biofuels. Extending these tax credits is a step in the right direction.”
Grassley and Conrad are longtime advocates for tax incentives for biofuels such as ethanol and biodiesel. Grassley is Ranking Member of the tax-writing Finance Committee. Conrad is a senior member of the Finance Committee and Chairman of the Senate Budget Committee. Grassley is a senior member of the Budget Committee.
The bill they introduced today – the Grow Renewable Energy from Ethanol Naturally Jobs Act of 2010, or the GREEN Jobs Act of 2010 -- is cosponsored by Senators John Thune (R-SD), Ben Nelson (D-NE), Mike Johanns (R-NE) and Tim Johnson (D-SD). The bill would extend the current $.45 per gallon VEETC and the $.10 per gallon small ethanol producers tax credit for five years, through the end of 2015. Both VEETC and the small ethanol producers tax credit are currently set to expire on December 31, 2010. In addition, the bill extends the $1.01 per gallon Cellulosic Biofuel Producer Tax Credit for three years, through the end of 2015. The Cellulosic Biofuel Producer Tax Credit is currently set to expire on December 31, 2012. In addition, the GREEN Jobs Act of 2010 would extend the ethanol tariff for 5 years, through the end of 2015. The tariff is currently set to expire on December 31, 2010.
Companion legislation was introduced in the House of Representatives by Rep. Earl Pomeroy (D-ND) and Rep. John Shimkus (R-IL).
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