Ag, ethanol groups press for fuel tax credit extensions

A quartet of ethanol and farming trade groups are pressing for long-term preservation of expiring ethanol tax credits they call vital to the industry’s viability, a move that comes amid signs that a House panel may trim the incentive.

Groups including the American Farm Bureau Federation and the Renewable Fuels Association sent a letter Monday to sponsors of bills that provide a five-year extension of the credits, warning of dire consequences if they lapse at year’s end.

“In the near term, failing to extend the Volumetric Ethanol Excise Tax Credit (VEETC), will result in the industry reducing its production volume by 38 percent. That is approximately 4 billion of the 10.75 billion gallons produced in 2009. This loss in ethanol production will result in the shedding of approximately 112,000 jobs in all sectors of the economy,” states the letter from those two groups, as well as the National Corn Growers Association and the American Coalition for Ethanol.

They sent the letter to Sens. Kent Conrad (D-N.D.) and Chuck Grassley (R-Iowa), and Reps. Earl Pomeroy (D-N.D.) and John Shimkus (R-Ill.).

The letter urges lawmakers to keep up the fight. It comes as both chambers are preparing to consider new energy bills.

The House Ways and Means Committee plans to mark up energy tax legislation as soon as this week. A draft in circulation last week would cut the 45 cents-per-gallon tax credit to 36 cents and extend it for one year.

Some environmentalists are lobbying to kill credits for corn-based ethanol.