Shadegg Offers Real Help on Gas Prices
Reducing Ethanol Tax Would Offer Immediate Relief
Washington – The law of unintended consequences is the one law Congress never fails to pass, and one of the consequences is the higher gasoline prices we face today. But Congress can bring down prices by cutting the tax on imported ethanol.
“This is a straightforward measure that will bring immediate relief to Americans facing $3-per-gallon gasoline prices,” said U.S. Congressman John Shadegg, who today introduced the Ethanol Tax Relief Act. “With the gasoline additive MBTE being phased out, almost every gallon of gasoline sold in the United States is going to require ethanol. But right now our domestic ethanol supply is inadequate to meet this increased demand. As the cost of ethanol rises, so do gasoline prices. The answer is to temporarily suspend the tariff on imported ethanol.”
MBTE is used as a fuel oxygenate to reduce air pollution. It currently constitutes 1.4 percent of the U.S. gasoline supply, but Congress’ failure to pass MBTE liability protection last year means that MBTE producers are getting out of the business as rapidly as possible.
“Democrats in Washington are suggesting we raise taxes on energy companies – but that is exactly the wrong thing to do,” Shadegg said.
The only remaining approved oxygenate is ethanol. In an effort to protect our domestic ethanol industry, the U.S. levies a tariff of 2.5 percent and a 54-cent per gallon duty on imported ethanol. For the time being, however, the domestic ethanol supply is simply inadequate. The result is higher gasoline prices. Rep. Shadegg’s bill would suspend the taxes on imported ethanol until January 1, 2007, increasing supply and lowering prices.
“The U.S. ethanol supply will catch up to demand soon,” Shadegg said. “But American families need help now.”

Hey, Republicans–it’s not that hard….you do can avoid demagoguing at the pump.