Bill To Aid Ethanol Pipeline Introduced

July 20, 2008 07:00 PM

Pro Farmer Editors

Legislation to give pipeline owners the same tax benefits for moving ethanol as they currently receive for moving petroleum has been introduced by Sens. Tom Harkin (D-Iowa) and Richard Lugar (R-Ind.).

The lawmakers said the legislation was aimed at addressing the lack of infrastructure to efficiently transport liquid biofuels to market.

While the most efficient mode for transporting liquid biofuels is by pipeline, a provision in the tax code is effectively blocking Publicly Traded Partnerships (PTP) – that build and operate most liquid pipelines – from moving forward. By law, PTPs are supposed to earn 90 percent of their income from the exploration, transportation, storage, or marketing of depletable natural resources, including oil, gas, and coal, but not renewable fuels. The bill would change the tax code to state that PTPs can earn "qualified” income from the transport, storage, or marketing of any renewable liquid fuel approved by the Environmental Protection Agency.

"We must seize control of our energy future and shift rapidly and robustly to clean, home-grown sources of energy, including ethanol and other renewable fuels. Our bill makes a simple change to the tax code that meets the demands and realities of the 21st century energy marketplace, removing barriers so that biofuels producers in the Midwest and elsewhere will have an efficient, inexpensive way to transport these renewable fuels to the market. And it will continue to provide relief to consumers getting hit hard with rising fuel costs," according to Harkin.

"We must explore every option for reducing our dependence on foreign oil," Lugar said. "Overcoming problems in moving ethanol through pipelines, as Brazil has done, is important in developing the full promise of America's renewable fuels. This legislation will help determine U.S. infrastructure planning and development."


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