In a letter to the co-chairs of the Joint Select Committee on Deficit Reduction, the so-called “super committee” assigned to find ways to cut the deficit, the Renewable Fuels Association today urged them to “focus on comprehensive energy tax policy” rather than simply end the ethanol tax credit a week earlier than it is due to expire.
“On behalf of the more than 300 member companies of the Renewable Fuels Association, I write to strongly urge you to ignore calls from various special interests to repeal the current Volumetric Ethanol Excise Tax Credit, or VEETC,” RFA General Counsel Edward Hubbard wrote to Senator Patty Murray (D-WA) and Representative Jeb Hensarling (R-TX). Hubbard noted that while the ethanol industry had proposed ending the VEETC August 1st when it would have saved nearly $2 billion for the remainder of 2011, with a deadline of December 23rd deadline for congressional action for deficit reduction, “barely $100 million would be saved by ending VEETC before its scheduled expiration” on December 31.
Instead, RFA encourages the committee to “take a comprehensive look at all existing energy tax policies and eliminate those ongoing policies that serve only to pad the balance sheets of already profitable and very mature industries.”
If the committee is truly seeking to eliminate wasteful and market-distorting spending, we urge you to begin by rescinding permanent tax subsidies for the oil industry. Several tax loopholes, such as the Section 199 deduction for all oil and gas activity, the deduction for intangible drilling costs, and the depletion allowance for oil and gas wells, are available only to oil and gas companies and further strengthen the monopoly these companies have on the nation’s gasoline market. Removing these and other provisions would save at least $40 billion over the next decade – a pittance compared to the annual profits of oil companies – and significantly contribute to debt reduction efforts while simultaneously helping level the playing field for existing and emerging renewable fuel technologies.
Read the letter here.