Congress: Should Ethanol Subsidies Be Extended?

The heat is on again in the U.S. Congress to take action before the end of the year. Next on the list is whether or not to extend the ethanol subsidies.

First up to bat in the debate are Senators Dianne Feinstein and Jon Kyl calling for end end to the ethanol subsidies.

In a letter sent to Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell, 17 Senators expressed their lack of support for extending the current 54-cent-per-gallon tariff on ethanol imports and the 45-cent-per-gallon subsidy for blending ethanol into gasoline. Both provisions expire at the end of this year under current law.

The Renewable Fuels Association quickly responded, stating the job, economic, and tax benefits the subsidies produce. They base their response on a presentation by John Urbanchuk, economist and Technical Director at ENTRIX, Inc. titled "Importance of the Ethanol Tax Incentive in Driving the Growth of Biofuels".

The domestic ethanol industry helped support nearly 400,000 jobs and provided more than $16 billion in increased household income.