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Ethanol Limbo in Congress Continues

July 26, 2011

           

The partisan fight over raising the limit on the amount of money the federal government can borrow is ugly – even by Washington standards.  While the leaders of both parties are very close on many of the main sticking points, one area of contention still remains – raising revenue. Many Republicans, including virtually all of the House Republican Caucus, are adamantly opposed to any provisions that would raise revenue, such as eliminating tax breaks.  One such provision, the Klobuchar-Thune-Feinstein compromise on the future of the ethanol tax credit known as VEETC, could be a victim of the process. Now just seven days from default, both House Speaker John Boehner and Senate Majority Leader Harry Reid have introduced plans to move America passed the August 2nd deadline for default.  Each of their plans would cut trillions of dollars in government spending without raising revenue.  If all revenue raisers are off the table, then the prospects for including the ethanol compromise in this piece of legislation look grim. Sadly, the partisan bickering and dysfunction in Washington is preventing the passage of thoughtful legislation that would generate additional revenue for the federal government while simultaneously encouraging the evolution of American ethanol production and expanding the market for this domestically-produced renewable fuel. However, we have been in the 11th hour before and seen cooler heads prevail.  While the road to getting the ethanol compromise into law as part of the debt ceiling deal is uphill at the moment, it is not yet a dead end.  And, should this deal fail to yield an opportunity to include the ethanol tax compromise, other vehicles may present themselves such as the stalled Federal Aviation Administration reauthorization bill.  Worst case scenario is VEETC expires at the end of the year as planned.  The RFA will continue to look for opportunities to advance thoughtful ethanol policy that benefits taxpayers, consumers, and all ethanol producers alike. Adding insult to injury, House members from the Oil Patch are once again after farmers and ethanol producers.  Oklahoma Rep. John Sullivan is continuing his quest to end EPA's implementation of its E15 211(f) fuel waiver for cars, pickups, and SUVs made since model year 2000.  This is not the first time Rep. Sullivan has sought to carry the oil industry's water on this issue.  Back in February, Rep. Sullivan offered a very similar measure.  That measure passed and this current effort, should it come up for a vote, may as well.  But it is all a moot point.  Like the bill back in February, the underlying EPA and Department of Interior appropriations bill to which Rep. Sullivan is seeking to attach his amendment is virtually dead on arrival in the Senate and has already drawn a veto threat from the White House. This is a fool's errand for several reasons.  First, this is yet more political posturing when it comes to ethanol.  It has everything to do with reelection and nothing to with legislation.  Second, this is legislating through appropriating.  Having failed to stop ethanol in previous attempts, Rep. Sullivan is trying to make a mockery of the appropriations process by seeking to legislatively prohibit fuel choice for Americans at the pump.  Third, EPA's approval of E15 was based on the most rigorous federal testing of fuel we have seen to date.  The test vehicles were driven the equivalent of making 12 round trips to the moon. Texas Rep. Michael Burgess is offering similar amendments that would prohibit EPA from spending money to register any new fuel over 10 percent ethanol by volume. The ethanol industry, through its continued support of the RFA, will continue to offer new ideas and sound policy recommendations that are fiscally responsible yet forward-looking to ensure Americans have a choice at the pump other than foreign oil.