Washington – For years, Congress has showered tax breaks on ethanol, portraying the fuel that is derived mostly from corn as a home-grown alternative to oil imports.
But even the Corn Belt might not have imagined how good times could get, as the Senate voted Wednesday to double the amount of ethanol, to 8 billion gallons, that must be added to the United States’ gasoline supply by 2012.
“The Senate is poised to make ethanol a cornerstone of America’s energy policy,” said Sen. John Thune, a Republican from ethanol-producing South Dakota.
The provision, added to the energy bill by a strong bipartisan vote of 70-26, is widely regarded as critical to motivating Congress to complete the first overhaul of energy policy in a decade, a top priority of President Bush.
Opponents of the provision, including East and West Coast senators and the oil industry’s trade association, the American Petroleum Institute, contend that the cost of transporting ethanol from the Midwest could increase gasoline prices.
Sen. Charles Schumer, D-N.Y., called the mandate “nothing less than an ethanol gas tax” that would be levied on every motorist in the country.
“There is no sound public-policy reason for mandating the use of ethanol, other than the political might of the ethanol lobby,” Schumer said.
The 8-billion-gallon mandate is higher than any amount that has come before Congress and would give the industry its biggest boost since Congress approved a tax break for the fuel in 1978.
The provision was sought eagerly by farm-state lawmakers – Democrats and Republicans – underscoring that energy policy often is shaped by regional politics rather than party affiliation.
Bush applauded efforts to boost the ethanol requirement, saying it was an important element of a broader strategy to reduce the nation’s dependence on foreign oil.
“We’re pretty good about growing corn here in America, and we’ve got a lot of good corn growers,” Bush told industry officials during an energy efficiency conference in Washington.
Bush said he looked forward to the day when a future president would say, “Show me the crop report,” instead of asking, “How many barrels of crude oil are we importing?” Bush said it was important for Congress to approve a renewable fuel standard requiring a minimum amount of ethanol and biodiesel, which can come from soybeans as well as from recycled waste such as cooking grease.
The energy bill passed by the House in April would require 5 billion gallons of renewable fuel to be added to gasoline by 2012.
The Senate is expected to approve the energy bill within the next couple of weeks.
