Bill would extend ethanol subsidies to 2015

Sens. Chuck Grassley (R-Iowa) and Kent Conrad (D-N.D.) introduced legislation today to extend a tax break and tariff protection for domestic ethanol producers.

The bill, called the Green Jobs Act of 2010, extends the 45 cent per gallon credit and a 54 cent tariff on ethanol imports until 2015. The measure also includes breaks for small ethanol producers and for the production of cellulosic ethanol, a “next generation” follow-on to corn-based ethanol that promises better environmental benefits. 

Supporters say the bill will help lower dependence on foreign oil and create thousands of jobs. Critics of ethanol say the industry should be able to stand on its own. Cane ethanol producers from Brazil want Congress to let both the tax break and the tariff expire.

The Senate legislation mirrors a bill introduced in the House by Reps. Earl Pomeroy, another North Dakota Democrat, and John Shimkus, an Illinois Republican.

Ethanol industry representatives urged Congress to support the bills.

“Domestic ethanol use is lowering the price of gasoline, reducing imports of foreign oil, and helping stabilize and reinvigorate rural economies all across the country,” said Bob Dinneen, president of the Renewable Fuels Association.

“Extending these measures will ensure job growth and economic development across the entire country—all while reducing our dependence on foreign oil and cleaning our skies,” said Tom Buis, CEO of Growth Energy, another ethanol group.

The Natural Resources Defense Council’s Nathanael Greene offered a different perspective in this blog post. He says the jobs number ethanol producers tout are “wildly inflated.”