Bill extends ethanol tax incentives for five years

Two advocates of tax incentives for biofuels and ethanol are arguing that extending ethanol tax credits will create jobs and increase the nation's energy independence. 

Sens. Kent Conrad (D-N.D.) and Charles Grassley (R-Iowa) introduced a bill Tuesday that would extend through 2015 several tax credits including those for volumetric ethanol, small ethanol producers, cellulosic producers and the ethanol import tariff.  

Failure to extend the ethanol credit could cost 112,000 jobs, said Grassley, ranking member on the Senate Finance Committee. 

The bill, which has bicameral and bipartisan support, would extend the current 45-cent per gallon ethanol tax credit and the 10-cent per gallon credit for small producers for five years. In addition, the ethanol tariff would be extended through 2015. All three are set to expire at the end of this year. 

The measure also extends the $1.01 per gallon cellulosic biofuel tax credit for three years, through 2015. That credit expires at the end of 2012. 

"Our country is in serious danger because of skyrocketing energy costs," Conrad said. "This growing crisis demands urgent action ... extending these tax credits is a step in the right direction."

Reps. Earl Pomeroy (D-N.D.) and John Shimkus (R-Ill.) are sponsoring companion legislation in the House.