Ethanol industry downplays subsidy vote as close tally looms

“As the underlying bill is unlikely to ever become law, this effort is largely about re-election and intra-Senate politics than true energy policy,” the ethanol trade group spokesman said in a statement circulated Thursday morning.

“When lawmakers are ready for the kind of comprehensive and dispassionate discourse on energy the American people deserve, the ethanol industry will be ready,” he added.

Sources off Capitol Hill supporting Feinstein’s plan – which mirrors a bill she introduced with Sen. Tom Coburn (R-Okla.) – appeared cautiously optimistic Thursday that they can gather the 60 votes needed.

Capitol Hill aides say Democratic leadership is not whipping against the amendment, a change from a vote earlier this week when Coburn offered an identical version.

Coburn’s amendment fell well short, and Democratic leadership opposed it because they were angry that Coburn had sprung a surprise procedural move to bring it up.

Opponents of ethanol tax breaks are continuing to press lawmakers to kill the roughly $6 billion-per-year blender’s credit.

“Continuing to subsidize oil companies to blend ethanol – which they are already required to do by the Renewable Fuels Standard – is wasteful and unnecessary. This amendment will save U.S. taxpayers several billion dollars this year and have virtually no impact on ethanol production, jobs or prices,” states a letter to senators Thursday from a coalition of three-dozen industry, conservative and environmental groups that have united around opposition to ethanol.

Signatures on the letter range from food-sector groups (such as the National Chicken Council, the American Frozen Food Institute and the Grocery Manufacturers Association), green groups (such as the Sierra Club and National Wildlife Federation) and conservative groups like Americans for Prosperity.

But ethanol backers are trying to pull votes from Feinstein and Coburn, floating plans aimed at altering the incentives without killing them outright.

Sens. John Thune (R-S.D.), Amy Klobuchar (D-Minn.) and other ethanol backers this week floated a bill that would end the 45-cent per gallon ethanol blender’s credit (which is slated to expire at year’s end), but maintain a smaller and “variable” blender’s credit for three years when oil prices are below certain levels.



It would steer some savings from ending the credit to deficit reduction, while also extending credits for cellulosic ethanol production, small ethanol producers, and installing alternative fuel pumps.

Ethanol industry groups have thrown their weight behind the Thune-Klobuchar plan.

Their bill, Hartwig said, "would achieve immediate budget savings, help pay down the debt, protect against the vagaries of the oil market, expand ethanol refueling infrastructure, and continue to incent the commercialization of next generation ethanol technologies."

The senate will also vote Thursday on Sen. John McCain’s (R-Ariz.) amendment that would block use of federal funds for the construction of ethanol blender pumps or storage facilities.