Bipartisan ethanol tax deal will help move nation forward

Over the last couple of months, there has been a lot of debate in Congress about the future of ethanol tax policy.

But what people often forget is that the ethanol industry has been suggesting reform for more than a year. We recognized that the industry has changed, and that the policy must change as well.

The blender’s tax credit has been instrumental in developing the ethanol industry, but the most important challenge our nation faces today in securing our energy independence is not the continuation of this incentive, but access to a fair and open marketplace.

We have suggested a pathway that will not only create that market access but continue to provide the necessary incentives for developing the next generation of biofuels – cellulosic ethanol – to help our nation meet our stated goals of 36 billion gallons of renewable fuel by 2022.

Consumer choice at the pump is the most critical component of this plan to help us achieve this goal. Today there are about nine million Flex Fuel Vehicles in this country and the owners of these vehicles have a choice of fuel blends when they pull up to a Flex Fuel pump: E30, E50 or more. But unfortunately, there are fewer than 300 Flex Fuel pumps in the entire nation. Even as domestic automakers commit to making half their fleet Flex Fuel, the lack of pumps to serve this fleet means that most Flex Fuel Vehicles have never run on anything but gasoline.

That is why the recent proposal by Sens. Klobuchar (D-Minn.), John Thune (R-S.D.) and Dianne Feinstein (D-Calif.), to reform the ethanol tax credit, incentivize the production of next generation ethanol, promote market access through Flex Fuel pumps and reduce the federal deficit by $1.3 billion, deserves to be considered for passage.

The deal is not perfect. We could do much more to give motorists access to alternative fuels in the marketplace. But considering the rancorous debate on Capitol Hill, the fact that there is bipartisan agreement is reason enough to give their framework consideration. All three senators deserve praise for their work.

Ultimately, what the U.S. ethanol industry is looking for is the opportunity to compete on a level playing field, against global oil companies. Many of these oil companies would rather point fingers at the ethanol industry than agree to equity in access to the market.

Ethanol is the only commercially-viable alternative transportation fuel we have to foreign oil. But until alternatives like ethanol have access to the market – and consumers have choices other than gasoline derived from costly foreign oil – foreign oil companies will continue to dominate the market and compromise U.S. national security policy.

The Klobuchar-Thune-Feinstein agreement moves our nation in the right direction at a time when everyone should be stepping up to the plate. It deserves the support of the entire Congress.

Jim Nussle is a former Congressman from the state of Iowa and served as the director for the Office of Management and Budget under the George W. Bush administration. He currently serves as the President and COO of Growth Energy, the leading voice for the U.S. ethanol industry.

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