Groups press GOP '12 field to oppose tax breaks for ethanol

Friends of the Earth and Taxpayers for Common Sense are pressing GOP White House contenders to oppose ethanol tax breaks in a TV ad running in New Hampshire ahead of Monday’s presidential debate in the Granite State.

The ad shows that ethanol’s foes see the presidential contest as an opening to build support for ending billions of dollars' worth of tax breaks for blending ethanol into gasoline — an issue that’s bubbling up in the Senate next week too.

“What costs taxpayers $6 billion but makes no sense? Corn ethanol,” states the ad, noting it doesn’t help reduce the deficit or help solve the nation’s “oil addiction.”

The ad steers viewers to a website where they can write letters to lawmakers or local newspapers opposing ethanol tax credits.

Ethanol is tricky politics for White House GOP contenders because it’s a major industry in Iowa, home of the caucuses that are the first major state battle of the presidential election year.

Former Minnesota Gov. Tim Pawlenty said he favors a gradual phase-out of ethanol tax credits, while former Utah Gov. Jon Huntsman is skipping the Iowa caucuses in part due to his opposition to the ethanol subsidies.

Rep. Ron Paul (R-Texas) also opposes then, while former Massachusetts Gov. Mitt Romney supports ethanol subsidies (although as Slate’s John Dickerson notes, there actually isn't much daylight between his position and Pawlenty’s).

The new pressure on the GOP White House contenders comes ahead of a Senate test vote Tuesday on Sen. Tom Coburn’s (R-Okla.) plan to strip the 45-cent-per-gallon credit that refiners and fuel blenders receive for each gallon of ethanol purchased and mixed into gasoline.

The plan would also repeal the 54-cent-per-gallon import tariff that helps protect the domestic industry.

Coburn has been pushing to kill the subsidies along with Sen. Dianne Feinstein (D-Calif.) and others, while a bipartisan group of farm state lawmakers are backing plans to very gradually phase out tax credits for the fuel (more on the dueling proposals here).

The ethanol industry is lobbying senators to oppose Coburn’s amendment.

“This is the same kind of political gamesmanship that nations like Iran and Venezuela are exercising to keep consumer energy prices artificially high and Americans addicted to oil,” said Bob Dinneen, president of the Renewable Fuels Association, a major ethanol trade group.

But the Club for Growth, a conservative advocacy group, is pressing senators to back Coburn’s plan and listing it as a “key vote” in their 2011 lawmaker rankings.

“It’s time to end these economically irrational provisions for ethanol, which should be a first step in eliminating all government subsidies for energy production, including the abolition of government mandates on renewable fuel use,” the group said Friday.