On the heels of a letter asking for expiration of the ethanol tax incentives, the opposite side has responded. Senators Kent Conrad, D-N.D., and Charles Grassley, R-Iowa, have sent a letter, cosigned by 13 other Senators, to leaders of the Senate urging Congress to extend the ethanol tax credits and tariff provisions that are set to expire at the end of the year. The letter states that allowing the provisions to expire or remain expired would threaten jobs, harm the environment, weaken our renewable fuel industries, and increase our dependence on foreign oil.
According to economic analyses, letting the tax credits expire would be equivalent to raising taxes on American drivers. If the Volumetric Ethanol Excise Tax Credit is allowed to expire, drivers will face a 4.5 cent tax increase on every single gallon of E10 that they purchase and increased fuel prices will further harm the nation's already struggling economy.
Growth Energy CEO Tom Buis says the current ethanol tax incentives have played a critical role in the development of the ethanol industry in the United States and reducing dependence on foreign oil. In the near-term, he says, an extension of the ethanol tax incentive and the tariff will stabilize the marketplace, provide added certainty and give Congress the opportunity to consider longer term solutions next year.