Agricultural News
Repeal of Volumetric Ethanol Excise Tax Credit Causes an Outcry of Disappointment by Many Agricultural Groups
Thu, 16 Jun 2011 16:45:51 CDT
After the result on the Senate vote to end the federal tax incentive for the use of domestic ethanol, many organizations released statements of disappointment in the outcome. USDA Secretary Tom Vilsack, Renewable Fuels Association (RFA), Growth Energy, American Coalition for Ethanol (ACE), and National Corn Growers Association (NCGA) all released the following statements with their concern for the repeal of the Volumetric Ethanol Excise Tax Credit (VEETC).
USDA Secretary Tom Vilsack
Today, Agriculture Secretary Tom Vilsack issued the following statement on votes to undermind America's renewable energy industry:
The Department "President Obama has outlined a plan to reduce our oil imports by one-third by 2025. Biofuels play a central role in this plan, which is why this administration continues to support and invest in the development of these important, domestically produced fuels.
The Administration supports efforts currently underway in the Senate to reform and modernize tax incentives and other programs that support biofuels. However, today's amendments are not reforms and are ill advised. They will lead to job loss as our nation begins its economic recovery and pull the rug out from under industry, which will lead to less choice for consumers and greater dependence on foreign oil.
"We need reforms and a smarter biofuels program, but simply cutting off support for the industry isn't the right approach. Therefore, we oppose a straight repeal of the Volumetric Ethanol Excise Tax Credit (VEETC) and efforts to block biofuels infrastructure programs."
Renewable Fuels Association
Responding to the Senate vote to end the federal tax incentive for the use of domestic ethanol, known as VEETC, the Renewable Fuels Association issued the following statement:
"We are disappointed in the shortsightedness of this vote, particularly as this same body voted less than one month ago to preserve billions of dollars in taxpayer handouts to the oil industry. As the underlying bill to which this amendment is attached is unlikely to make it to the president's desk, this vote was a freebie with no real consequences. With this theater now in the past, the ethanol industry stands ready to work with the Senate, House, and the Obama Administration to enact thoughtful policies that responsibly address fiscal concerns while moving American ethanol production forward. America needs an energy agenda that embraces the energy technologies of the future, not the energy politics of the past. Our industry is ready to work in good faith to pass legislation like that proposed by Senators Thune and Klobuchar that achieves immediate budget savings, pays down the federal debt by $1 billion, and continues the expansion and evolution of America's ethanol industry."
Growth Energy
Following a vote by the U.S. Senate to adopt an amendment that would immediately repeal tax policy in support of renewable, domestic fuels, Growth Energy, the leading voice of ethanol supporters, issued the following statement:
"Ironically, the United States Senate has spent the better part of a week on an amendment that is unconstitutional and going nowhere, even while the news pours in that OPEC has hit a high-water mark of $1 trillion in revenues," Tom Buis, Growth Energy CEO, said.
"The Senate missed an enormous opportunity to take real action on deficit reduction and energy policy when it failed to put oil subsidies and giveaways to the same test as ethanol. Instead, senators turned a blind eye to the hidden costs of oil, and chose to waste time on an amendment that can be tossed out on constitutional test."
Growth Energy also released the following statement concerning the amendment by Senator John McCain that was rejected. The U.S. Senate rejected an amendment offered by Sen. John McCain to bar federal agencies from encouraging the installation of Flex Fuel pumps that give consumers a choice of ethanol fuel blends and save motorists money.
"Today, the Senate spoke in favor of offering consumers a choice at the pump. This is good news, because as Growth Energy has said over the last year, we need to reform access to the market, and the only way to do that is through Flex Fuel pumps," said Tom Buis, CEO of Growth Energy, the country's leading voice of ethanol supporters.
"If we are ever going to break the hold that Big Oil has over American consumers, we have to offer a choice at the pump. That's what Flex Fuel pumps offer. Today we have more than 8 million Flex Fuel vehicles on the road, but only a little more than 2,000 Flex Fuel pumps in the ground," Buis said.
Last year, Growth Energy proposed its Fueling Freedom plan to divert the VEETC into an incentive to encourage installation of Flex Fuel pumps. Recently, Growth Energy announced its support of the Thune-Klobuchar bill, a bipartisan compromise that would wind down the VEETC entirely in exchange for Flex Fuel pump incentives; that bill would also help reduce the deficit.
American Coalition for Ethanol
The American Coalition for Ethanol (ACE) today criticized the Senate for voting in favor of ending the ethanol tax incentives including the Volumetric Ethanol Excise Tax (VEETC).
However, ACE Executive Vice President Brian Jennings added that the votes are symbolic and will not become law.
"While today's vote has no chance of becoming law, because it is part of an underlying bill that is unconstitutional and dead-on-arrival in the House of Representatives, it nonetheless is disappointing. If the amendment were to be enacted, it would raise gas prices and fuel taxes on American consumers, jeopardize U.S. jobs, put advanced biofuels in grave danger, and limit consumer fuel choice," Jennings said.
"Ironically nearly one month ago, the U.S. Senate voted to protect the nearly $4 billion dollars Big Oil receives in tax subsidies," Jennings said. "We are disappointed senators are willing to reward Big Oil for shamelessly hoarding subsidies, but are willing to penalize the biofuels industry, especially when we've voluntarily offered to sacrifice part of the existing tax credit for deficit reduction."
Jennings says the amendment does nothing to distract the biofuels industry from charging forward with reform of ethanol tax incentives in Congress.
"The biofuels industry has already proposed to end the blenders' credit (or VEETC) by July 1, sacrificing it for deficit reduction, next-generation biofuels, and consumer fuel choice. We will continue to work in a proactive and responsible way to achieve this reform through S. 1185, the Ethanol Reform and Deficit Reduction Act sponsored by Senators Thune (R-SD), Klobuchar (D-MN) and others. We are confident this reform effort will move forward in Congress and be part of legislation that actually stands a chance of making it to the president's desk," Jennings said
National Corn Growers Association
The National Corn Growers Association expressed severe disappointment today that the Senate allowed petty politics to trump prudent policy in the fight for the future of the ethanol industry. The passage of Sen. Dianne Feinstein's amendment to immediately repeal the Volumetric Ethanol Excise Tax Credit represents a tax increase on fuel that will kill jobs in rural America and hit all consumers in the pocketbook, NCGA said.
"Today the Senate voted against rural America and domestic, renewable energy, and in favor of more foreign oil," NCGA President Bart Schott, a grower from Kulm, N.D., said. "Sen. Feinstein has unfairly hit at the heart of an important agricultural industry while remaining unified with subsidy-laden Big Oil."
Schott pointed out that one comprehensive report found that subsidies for the oil industry total up to $280 billion annually, representing up to $2 per gallon of gasoline. A recent legislative effort to eliminate $2 billion of these oil subsidies went nowhere in Congress, he noted, after organizations like the National Taxpayers Union painted it as a tax increase.
The ethanol industry supports more than 400,000 U.S. jobs, contributing more than $56 billion each year to the nation's economy and $11 billion in federal, state and local tax revenue, Schott said.
"Last year, 81 senators voted to extend the blender's credit for one year to allow us to move forward with a proposal to reform these incentives," Schott said. "We have proposed such legislation and have shown a willingness to work with all parties on a solution, and we thank the senators who stood by their vote last year and stood by us in this week's effort."
Also Thursday, in a victory for corn growers and the ethanol industry, the Senate rejected a proposed amendment by Sen. John McCain that would have prevented the U.S. Department of Agriculture from providing grants for blender pumps.
"This is good news because we want to do all we can to encourage fuel choice," Schott said. "Blender pumps provide options for those with flex-fuel vehicles and can help the ethanol industry grow in the years to come."
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