Agricultural News
Many Agricultural Groups Voice Opinions on Agreement to End Ethanol Tax Incentive
Thu, 07 Jul 2011 14:53:14 CDT
In a recent agreement on legislation between Senators Amy Klobuchar (D-MN), John Thune (R-SD) and Dianne Feinstein (D-CA), it was decided to end the current ethanol tax incentive, known as the Volumetric Ethanol Excise Tax. The VEET would be ended on July 31, while other ethanol-related tax credits would be extended for a limited time. At the end of VEET, over $1 billion would be immediately invested in deficit reduction, while the rest will be used for infrastructure investment and cellulosic ethanol investment.
Many organizations have released statements concerning this recent agreement on the VEET legislation. Below you will find comments from the Renewable Fuels Association, Advanced Ethanol Industry, American Coalition for Ethanol, National Corn Growers Association and Growth Energy.
Renewable Fuels Association
Reacting to news that an agreement on the future of ethanol tax policy has been reached between Senators Amy Klobuchar (D-MN), John Thune (R-SD), and Dianne Feinstein (D-CA), Bob Dinneen, President and CEO of the Renewable Fuels Association (RFA) offered the following reaction:
"This bipartisan effort to find common ground is the kind of sensible policy making American voters desperately want from their elected leaders. We greatly appreciate the leadership of Senators Klobuchar and Thune in doggedly pursuing a solution to this impasse. Walking away from investments made in America's ethanol industry cold turkey would jeopardize the future of biofuel production in America, including stifling the progress of advanced and cellulosic ethanol technologies.
"A particularly important part of this agreement is the commitment to continue the evolution of the industry to new technologies and new feedstocks for cellulosic ethanol. We are pleased the agreement recognizes the importance of cellulosic ethanol by committing $305 million to this effort. However, we are concerned that capping cellulosic ethanol development sends the wrong signal and we will continue to work with the Congress and the Obama Administration to address this anomaly in as this process continues."
"This is not the perfect compromise, but it does demonstrate the willingness of American ethanol producers and advocates to do their part to address budget concerns while not sacrificing the progress and evolution of the industry. I would challenge other industries to step up to the plate in the same manner. The status quo of American energy and tax policy simply won't work."
Leaders of the RFA and the ethanol industry also praised the work of these senators.
Chuck Woodside, CEO of farmer-owned KAAPA Ethanol in Minden, Nebraska, and Chairman of the RFA stated: "Answering America's most challenging questions will take this kind of bipartisan, roll up your shirt sleeves approach that is too often lacking in Washington. While it is clear this agreement does not encompass everything proposed by Senators Klobuchar and Thune in their bill (the Ethanol Tax Reform and Deficit Reduction Act), their tireless effort to find a path forward is a testament to their commitment to American ethanol production and is greatly appreciated by advocates of renewable fuels. America's ethanol industry is ready to move beyond the Kabuki dance of Beltway politicking and get on with the business of growing and diversifying the industry through new technologies and greater market access."
Mike Jerke, General Manager of farmer-owned Chippewa Valley Ethanol Company in Benson, Minnesota, and Chairman of the Renewable Fuels Foundation stated: "Senator Klobuchar's commitment to continuing the growth and evolution of American ethanol production is unparalleled. Together, Senators Klobuchar and Thune are showing the kind of leadership needed to end American addiction to imported oil. Minnesota's ethanol producers look forward to continuing our work with strong and forward-looking leaders like Senators Klobuchar and Thune to realizing the full potential of domestic ethanol production and use from all sources."
Advanced Ethanol Industry
Reacting to the statements released by Senators Amy Klobuchar (D-MN), John Thune (R-SD), and Dianne Feinstein (D-CA) announcing an agreement on a proposed ethanol tax reform package, Brooke Coleman, Executive Director of the Advanced Ethanol Council (AEC) offered the following statement:
"We appreciate the willingness of Senators Klobuchar, Thune and Feinstein to put advanced biofuels at the forefront of ongoing negotiations about how to innovate and reduce the cost of U.S. ethanol policy. This agreement has enough of the right ingredients to move the conversation forward. At the same time, there is a fundamental problem with how the advanced biofuels piece is crafted that will need to be addressed to be meaningful to the industry. While we appreciate the ambition to lengthen the duration of the tax credits, the last minute switch from a yearly credit to a gallon-based, capped credit adds artificial and unnecessary layers of uncertainty and risk for the financing community. As the President said yesterday, it is critical to U.S. energy security and U.S. national security to get this right. We look forward to working with Congress and the Administration to fix these deficiencies before the proposal is enacted into law. We particularly appreciate Senators Klobuchar and Thune for their dogged commitment to reforming rather than terminating the federal commitment to renewable fuels, and their steadfast protection of tax incentives designed to create jobs and promote alternatives to foreign oil."
American Coalition for Ethanol
Behind-the-scenes bipartisan negotiations have resulted in a legislative compromise in the U.S. Senate that reforms the existing Volumetric Ethanol Excise Tax Credit (VEETC) or the "blenders' credit." The compromise would end VEETC on July 31, invest over $1 billion in deficit reduction, and provide modest incentives for blender pumps, cellulosic biofuel, and small ethanol producers.
In response, Brian Jennings, Executive Vice President of the American Coalition for Ethanol, released the following statement.
"We thank Senators John Thune (R-SD) and Amy Klobuchar (D-MN) for their support and leadership in negotiating this compromise, and we echo the sentiments of Senator Thune who recently called the legislation 'trying to make the best of a bad situation.' Despite its shortcomings, this compromise represents the art of the possible given the temperament of Congress and buys us time to tackle unfinished business by building a new and broader coalition. ACE will support efforts in Congress to enact this legislation into law by the end of July."
"ACE is pleased with the three-year blender pump tax credit, a modest but important down-payment on consumer fuel choice. We'll work with marketers to take full advantage of the improved incentives to convert to blender pumps. ACE is also grateful that the Small Ethanol Producer Tax Credit, which is crucial for many of our independent and farmer-owned members, was extended for one year."
"We are disappointed that the variable incentive, a key and low-cost safety net for independent and farmer-owned plants facing market volatility that Senators Klobuchar and Thune included in their original legislation, did not make it into this compromise. And, we know that there is much more work to be done with regards to deployment of Flexible Fuel Vehicles and supporting the sale of midlevel ethanol blends and E85. Finally, unnecessary limitations placed on the cellulosic biofuel incentives need to be fixed in order to meaningfully help spur the commercialization of these promising fuels. ACE will continue working with the Administration and Congress on these unfinished priorities."
"Regardless of how some will try to characterize eliminating VEETC, doing so will raise gas taxes on ethanol blended fuel. Moreover, it is an outrage that some elected officials continue to protect billions in subsidies for the oil industry, including a very recent vote against cutting $4 billion in Big Oil tax subsidies. It is time for Congress to repeal oil tax subsidies."
National Corn Growers Association
National Corn Growers Association President Bart Schott released the following statement in response to today's announcement of a bipartisan compromise on ethanol tax incentives. Senators John Thune (R-SD) and Amy Klobuchar (D-MN) have tirelessly led efforts on behalf of the ethanol industry for the past several weeks.
"NCGA is grateful to Senators Thune and Klobuchar for the hard work and dedication they have put in to reaching a final deal. There are many positive components of this compromise that are important to the ethanol industry and rural America. The final compromise reflects both the importance of the ethanol industry to achieve energy independence and the need for fiscal responsibility. The ethanol industry continues to have a positive impact on all parts of America, and we are committed to working with Congress in the future on steps that can move the ethanol industry and the nation's economy forward.
"At the same time, we call on Congress to level the playing field when it comes to energy policy. Unlike the oil and gas industries, ethanol has been proactively working to reform tax policy affecting the industry and secure a safety net while reducing the overall cost to the federal government."
Growth Energy
Growth Energy, the coalition of U.S. ethanol supporters, released the following statement in response to the announcement of a deal made between Sens. John Thune (R-SD), Amy Klobuchar (D-Minn.) and Dianne Feinstein (D-Calif.) to reform the Volumetric Ethanol Excise Tax Credit (VEETC) in order to invest in next generation ethanol, remove barriers to the marketplace by providing consumer access at the pump, and reduce the federal budget deficit.
"Senators Thune and Klobuchar worked tirelessly to help shape a compromise that will benefit all Americans. This proposal will benefit consumers at the pump, reduce our dependence on foreign oil by investing in next generation biofuels, and make a significant contribution to reducing our nation's budget deficit," said Growth Energy CEO Tom Buis.
"Our nation has reaped enormous economic and environmental benefits from the use of ten percent ethanol in our fuel supply. Ethanol is home grown, better for the environment and is the only commercially viable alternative to foreign oil today. Increasing access to higher level blends of clean, renewable ethanol made from a variety of feedstocks will bring our nation one step closer toward achieving our energy independence goals."
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