Ethanol organization Growth Energy is proposing a redirection and eventual phasing out of government support for ethanol in return for increasing infrastructure investment that would level the playing field with fossil fuels and give consumers true freedom to choose their fuel.
Specifically, the “Fueling Freedom” plan calls for funds currently going to the oil industry as an incentive for blending ethanol into gasoline (the VEETC) to be redirected to provide backing for the build out of distribution infrastructure for ethanol – such as tax credits for retailers to install 200,000 blender pumps and federal backing of ethanol pipelines – and requiring that all automobiles sold in the U.S. be flex-fuel vehicles – as many as 120 million.
“We often hear, if Brazil can do it, why can’t we?” said Growth Energy CEO Tom Buis during a press conference this morning. “Well, Brazil has a built-out infrastructure. We need to do the same.”
Listen to the entire press conference here: Growth Energy Press Conference
POET CEO Jeff Broin, Growth Energy Co-Chairman, believes the time has come to transition to an open market where consumers can choose their fuel. “With a blender pump in every neighborhood and a Flex Fuel Vehicle in every garage, ethanol can compete,” Broin said. He notes that the U.S. ethanol industry produces more energy for America’s motorists than Saudi Arabia and that ethanol is already competitive with gasoline, averaging 50 to 80 cents below the cost of gasoline this year.
Growth Energy advisory board member and former congressman Jim Nussle says they certainly support the Volumetric Ethanol Excise Tax Credit or VEETC, otherwise known as the blenders tax credit, but it may be time to try something different. “If you always do what you always did, you’ll always get what you always got,” Nussle said. “If we shift the emphasis from VEETC to building out infrastructure, we will reap benefits.” The organization plans to talk with policy makers over the coming weeks in the hopes of selling the idea and possibly including it in an energy bill. “The policy makers are begging us for creativity now,” said Nussle.
However, the plan might be a hard sell on Capitol Hill without the backing of the entire ethanol industry, and that looks unlikely at the moment. The American Coalition for Ethanol (ACE), American Farm Bureau Federation (AFBF), the National Corn Growers Association (NCGA), the National Sorghum Producers, and the Renewable Fuels Association (RFA) together issued a press release following the Growth Energy announcement reaffirming support for the extension of current ethanol tax incentives through 2015. ACE Executive Vice President Brian Jennings says it’s too late to consider alternatives this year. “We have talked to policymakers about alternatives to VEETC. The universal response we have received from our champions on Capitol Hill is that while some of those alternatives are interesting, those alternatives cannot possibly be adopted at this stage in the legislative calendar, with just about 30 days remaining until Congress adjourns for the mid-term elections,” said Jennnings.