Sens. Tom Coburn (R., Okla.) and Ben Cardin (D., Md.) introduced legislation today that would take away the 45 cents per gallon tax credit ethanol blenders currently enjoy. Of course, even if that bill passes, the ethanol producers will still get a government-engineered boost from the 54 cent tariff slapped on ethanol imports and the Renewable Fuels Standard, which mandates 36 billion gallons of renewable fuels by 2022.
But, with Congress more spending-conscious than usual, this might be the time for this ethanol credit to be canned. Coburn and Cardin estimate that eliminating the credit could save $6 billion annually. They’re also touting a Government Accountability Office report released last week which said that “given the requirements of the fuel standard, the ethanol tax credit is largely unneeded today to ensure demand for domestic ethanol production.”
Also on the energy front, some on the Hill, with an eye to the rising gas prices, are hoping to re-launch a bipartisan group of lawmakers to focus on energy legislation. In 2008, a group of senators tried to compromise, working out a plan that would have created incentives to spur increased use of green energy vehicles in exchange for increased offshore drilling.