Feinstein Wants Ethanol Subsidies Lowered

Feinstein Wants Ethanol Subsidies Lowered

RFA disputes California Senator's claims.

Concerned for the cost of the massive tax bill, Senator Dianne Feinstein, D-Calif., has sought to add an amendment to the measure that would cut the ethanol tax credit and import tariff to 36 cents a gallon each. The current U.S. ethanol tax credit of 45 cents and the import tariff of 54 cents would be extended through 2011 under the proposal. Her amendment would also cut the 10-cent-per-gallon tax credit that goes to small ethanol producers to 8 cents. Six senators co-signed Feinstein's proposal.

Feinstein said the cost of extending the current ethanol tax credit for another year would total about $5.3 billion, as federal law already requires 12.6 billion gallons of ethanol to be produced during 2011.

Feinstein also said the import tariff makes the U.S. more reliant on foreign oil from OPEC, because it discourages ethanol imports from Brazil, Australia and India. However, Matt Hartwig of the Renewable Fuels Association points out the U.S. sends more money to OPEC and other oil producing nations in just one week than would be spent during all of 2011 in ethanol subsidies. Hartwig says claiming the use of ethanol increases our reliance on imported oil defies logic.

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