Pomeroy, Shimkus seek colleagues’ support for ethanol tax credit extension

Two farm state House members are seeking cosponsors for an upcoming bill to extend a major ethanol industry tax break for five years and boost other incentives as well.

Reps. Earl Pomeroy (D-N.D.) and John Shimkus (R-Ill.) are circulating a “dear colleague” letter for a bill that would extend the 45 cents-per-gallon credit until the end of 2015.

The letter cites a Renewable Fuels Association study released last week that concludes allowing the incentive to die would cost 112,000 jobs. The credit boosts the ethanol market by paying refiners and gasoline blenders to mix ethanol into their product.

Their letter says that in 2009, tax revenue from domestic ethanol production brought in  $8.4 billion in federal revenue, or $3.4 billion more than the cost of the credit.

Their planned bill would also extend a credit for small producers scheduled to lapse at year’s end for five years, and extend until 2016 a credit for producing cellulosic ethanol that is scheduled to lapse at the end of 2012.

“Our legislation will provide meaningful long-term extensions of these tax credits, giving the industry the certainty it needs to maintain current production and continue to invest and develop the next generation of biofuels,” the letter states.