Secretary of Agriculture Ed Schafer says that ethanol is an important part of the nation’s plan for energy security, but he expects that ethanol incentives such as the blenders tax credit will eventually be phased out.
During an appearance this week in Kansas City, Schafer said ethanol producers need to prepare for an eventual end to these kinds of incentives. “Because they have been built in today, I think we can’t just shut them off,” Schafer said. “I think it’s important to say here’s the target, we are going to gradually reduce them so that you can adjust your operations to operate without them.”
He says that should start happening when the ethanol industry becomes profitable enough to operate on its own and when production begins to approach 34 billion gallons per year – which could be 13-14 years down the road.
Schafer also defended the Renewable Fuels Standard and noted that ethanol blended gasoline actually saves consumers between 20 cents and 35 cents a gallon. And he said that there continue to be promising developments in cellulosic ethanol.