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 ThuneRepublicans give Barr vote of confidence Trump creates new headaches for GOP with top intelligence pick GOP casts Sanders as 2020 boogeyman 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 Jean KlobucharWinners and losers from the South Carolina debate Sanders most searched, most tweeted about candidate during Democratic debate Democrats duke it out in most negative debate so far MORE (D-Minn.), another sponsor.

Other sponsors are Sens. Dan CoatsDaniel (Dan) Ray CoatsGrenell asks top intel official to remain in role amid lawmaker concerns John Ratcliffe back under consideration by Trump for top intel job Trump creates new headaches for GOP with top intelligence pick MORE (R-Ind.), Richard DurbinRichard (Dick) Joseph DurbinOvernight Energy: EPA to regulate 'forever chemicals' in drinking water | Trump budget calls for slashing funds for climate science centers | House Dems urge banks not to fund drilling in Arctic refuge Democratic senators criticize plan that could expand Arctic oil and gas development Democratic senators ask DOJ watchdog to expand Giuliani probe MORE (D-Ill.), Al FrankenAlan (Al) Stuart FrankenAl Franken blasts Susan Collins: She'll let Trump 'get away with anything' Bill Press: Don't forget about Amy Key moments in the 2020 Democratic presidential race so far MORE (D-Minn.), Charles GrassleyCharles (Chuck) Ernest GrassleyMcSally unveils bill to lower drug prices amid tough campaign Ernst endorses bipartisan Grassley-Wyden bill to lower drug prices Overnight Health Care: Nevada union won't endorse before caucuses after 'Medicare for All' scrap | McConnell tees up votes on two abortion bills | CDC confirms 15th US coronavirus case MORE (R-Iowa), Tom HarkinThomas (Tom) Richard HarkinTrump's trial a major test for McConnell, Schumer New Hampshire parochialism, not whiteness, bedevils Democrats Democrats must question possible political surveillance MORE (D-Iowa), John HoevenJohn Henry HoevenSenate drama surrounding Trump trial starts to fizzle Bottom Line The Hill's Morning Report — Schiff: Clear evidence of a quid pro quo 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 JohnsonTrump faces tough path to Fannie Mae, Freddie Mac overhaul Several hurt when truck runs into minimum wage protesters in Michigan Senate GOP rejects Trump’s call to go big on gun legislation MORE (D-SD), Mark KirkMark Steven KirkOn the Trail: Senate GOP hopefuls tie themselves to Trump Biden campaign releases video to explain 'what really happened in Ukraine' Why Republicans are afraid to call a key witness in the impeachment inquiry MORE (R-Ill.), Claire McCaskillClaire Conner McCaskill70 former senators propose bipartisan caucus for incumbents Democrats criticize Medal of Freedom for Limbaugh as 'slap in the face' Kansas City, Kan., responds to Trump tweet: We root for the Chiefs, too MORE (D-Mo.), Jerry MoranGerald (Jerry) MoranThe Hill's Morning Report — AG Barr, GOP senators try to rein Trump in Overnight Defense: Senate votes to rein in Trump war powers on Iran | Pentagon shifting .8B to border wall | US, Taliban negotiate seven-day 'reduction in violence' The 8 Republicans who voted to curb Trump's Iran war powers MORE (R-Kan.) and Ben Nelson (D-Neb.).