Legislation would reduce the current blender’s credit, also known as VEETC, for a two-year period before transitioning to a tax credit that would adjust based on the price of oil.
Source: National Corn Growers Association news release
Washington (May 4, 2011) – The National Corn Growers Association (NCGA), the American Coalition for Ethanol (ACE), Growth Energy and the Renewable Fuels Association (RFA) today praised the legislation offered by a bipartisan group of senators, led by Iowa Senator Chuck Grassley, to responsibly transition and transform current ethanol tax policy.
This legislation would reduce the current blender’s credit, also known as VEETC, for a two-year period before transitioning to a tax credit that would adjust based on the price of oil. Importantly, this legislation would also improve upon current tax credits for the installation of blender pumps and ethanol fueling infrastructure. Additionally, the bill would extend tax credits for small ethanol producers as well as for advanced and cellulosic ethanol.
Original cosponsors of the Domestic Energy Promotion Act of 2011 include: Senator Kent Conrad (D-ND), Senator Mike Johanns (R-NE), Senator Amy Klobuchar (D-MN), Senator Al Franken (D-MN), Senator Tim Johnson (D-SD), Senator Tom Harkin (D-IA), and Senator Ben Nelson (D-NE).
The groups issued the following statement:
“The leadership of Senator Grassley and this distinguished bipartisan group of cosponsors has been and remains instrumental in allowing America’s ethanol industry to grow and evolve. At a time of near-record gas prices and continued volatility in world oil markets, America’s growing production and reliance of domestic ethanol sources is creating jobs, keeping gasoline prices down, and reducing this nation’s appetite for imported oil. Domestic Energy Promotion Act of 2011 would ensure we don’t abandon this increasingly vital American industry, but rather smartly and responsibly foster its continued growth and evolution.
“This legislation rightfully recognizes budget constraints by reforming the ethanol tax credit and significantly reducing its cost. Additionally, this bill would improve current tax credits for the installation of blender pumps offering higher level ethanol blends and provide Americans more choice when they fill up. Critically, this legislation would also ensure progress made to commercialize advanced ethanol technologies utilizing new feedstocks such as grasses and municipal solid waste is accelerated. We thank these senators for their leadership in introducing this bill and look forward to working with them through the legislative process that ultimately ends with the President’s signature.”
According to a recent report from Iowa State University, the University of Wisconsin, and the Center for Agriculture and Rural Development, the growth in production and use of ethanol kept American gas prices $0.89 lower than it otherwise would have been in 2010. Such downward pressure on the gasoline market saved the average American family more than $800 last year alone. From 2000-2010, ethanol kept gasoline prices $0.25 cents lower on average than they otherwise would have been, resulting in nearly $35 billion in avoided cost at the pump for consumers.