While Coburn's language would completely eliminate the subsidy, the pro-ethanol proposal would cut off the subsidy on July 1, and replace it with a variable subsidy that fluctuates with the price of oil. Proponents of the bill, like Sen. Richard Lugar (R-Ind.), said the variable subsidy bill would help guard against attempts by oil producers to lower the price of oil in order to drive the ethanol industry out of business.

"The proposal acts as a safety net to prevent OPEC from manipulating oil prices to kill off their ethanol rival," Lugar said. "When oil prices are high, as they are today, corn-based ethanol would not receive subsidy payments."

Under this proposal, ethanol blenders would get no subsidy at all when oil prices are above $90 a barrel. If oil falls to between $80 and $90 a barrel, they would get a six cents per gallon subsidy. Another six cents would be added for each $10 drop in the price of oil, and a maximum subsidy of 30 cents a gallon could be received when oil falls to $50 a barrel or less (a summary of the bill is here).

ADVERTISEMENT

That's still less than the current 45 cents a gallon subsidy that ethanol blenders receive currently, regardless of the price of oil.

Proponents of the bill say ending the current system on July 1 and moving to a variable subsidy would save $2.5 billion. In a nod to Coburn and his supporters, the bill would use $1 billion of that for deficit reduction.

The rest would be used for the variable subsidy, but also for the development of ethanol infrastructure and other incentives. For example, the bill would expand tax credits to ethanol blender pumps, and extend through 2014 the small producer ethanol credit.

The bill is sponsored by Sen. John ThuneJohn Randolph ThuneRick Scott acknowledges Biden 'absolutely' won fair election After vote against aid package, Golden calls for more bipartisanship Graham: Trump will 'be helpful' to all Senate GOP incumbents MORE (R-SD), who said Monday that senators should oppose Coburn's attempt to immediately cut off all subsidies to ethanol without warning.

"What the amendment our colleagues are trying to get a vote on tomorrow would do is basically to say to this industry: Yes, we are going to take away this particular tax incentive, and we are going to do it right in the middle of the year," Thune said. "We are going to do it, and we do not like this industry -- which is probably what animates a lot of the opposition to this because if people look at the facts, if they look at the contribution that biofuels have made to our fuel supply in this country, it is significant."

"This bill would transition to a more sustainable model of support for renewable fuel production in America instead of pulling the rug out from under an industry, with 4 days' notice, that employs hundreds of thousands of people in this country, as well as provides an alternative to oil," said Sen. Amy KlobucharAmy KlobucharOpen-ended antitrust is an innovation killer FBI, DHS and Pentagon officials to testify on Capitol riot Five big takeaways on the Capitol security hearings MORE (D-Minn.), another sponsor.

Other sponsors are Sens. Dan CoatsDaniel (Dan) Ray CoatsHow President Biden can hit a home run Former Trump intel chief Coats introduces Biden nominee Haines at hearing Senate Intelligence Committee leaders warn of Chinese threats to national security MORE (R-Ind.), Richard DurbinDick DurbinSenate mulls changes to .9 trillion coronavirus bill Partisan headwinds threaten Capitol riot commission Murkowski undecided on Tanden as nomination in limbo MORE (D-Ill.), Al FrankenAlan (Al) Stuart FrankenHarrison seen as front-runner to take over DNC at crucial moment The Hill's Morning Report - Presented by the UAE Embassy in Washington, DC - Trump, Biden clash over transition holdup, pandemic plans The Hill's Morning Report - Fearing defeat, Trump claims 'illegal' ballots MORE (D-Minn.), Charles GrassleyChuck GrassleyGrassley to vote against Tanden nomination Grassley says he'll decide this fall whether to run in 2022 Yellen deputy Adeyemo on track for quick confirmation MORE (R-Iowa), Tom HarkinThomas (Tom) Richard HarkinTwo more parting shots from Trump aimed squarely at disabled workers A pandemic election should move America to address caregivers' struggles The Memo: Trump attacks on Harris risk backfiring MORE (D-Iowa), John HoevenJohn Henry HoevenBiden reignites immigration fight in Congress McConnell about to school Trump on political power for the last time Senate GOP opposition grows to objecting to Electoral College results MORE (R-ND), Mike JohannsMichael (Mike) Owen JohannsMeet the Democratic sleeper candidate gunning for Senate in Nebraska Farmers, tax incentives can ease the pain of a smaller farm bill Lobbying World MORE (R-Neb.), Tim JohnsonTimothy (Tim) Peter JohnsonCornell to launch new bipartisan publication led by former Rep. Steve Israel Trump faces tough path to Fannie Mae, Freddie Mac overhaul Several hurt when truck runs into minimum wage protesters in Michigan MORE (D-SD), Mark KirkMark Steven KirkSenate majority battle snags Biden Cabinet hopefuls The Hill's Morning Report - Sponsored by Facebook - Senate makes SCOTUS nominee Barrett a proxy for divisive 2020 Senate Republicans scramble to put Trump at arm's length MORE (R-Ill.), Claire McCaskillClaire Conner McCaskillThe Memo: Punish Trump or risk a repeat, warn Democrats GOP senators criticized for appearing to pay half-hearted attention to trial Hawley watches trial from visitor's gallery MORE (D-Mo.), Jerry MoranGerald (Jerry) MoranGraham: Trump will 'be helpful' to all Senate GOP incumbents The Hill's 12:30 Report - Presented by Facebook - Biden vs. Trump, part II Passage of the John Lewis Voting Rights Advancement Act is the first step to heal our democracy MORE (R-Kan.) and Ben Nelson (D-Neb.).