A proposal by Growth Energy to phase out ethanol tax incentives has brought the fight out in the two older ethanol advocacy organizations, along with several agricultural groups.
Saying that it is too late in the congressional session to switch horses, the American Coalition for Ethanol and the Renewable Fuels Association have pulled rank on the younger Growth Energy group and lined up with powerhouse ag groups American Farm Bureau Federation, National Corn Growers Association (NCGA) and National Sorghum Producers to storm Capitol Hill in favor of renewing the Volumetric Ethanol Excise Tax Credit (VEETC) for another five years.
Hundreds of news stories, blog posts, and tweets have been written since yesterday focusing on the division in the industry and some lawmakers are starting to take sides on the issue. Corn belt loyalists like Sen. Charles Grassley (R-IA) are committed to fighting for a long term extension, but House Ag Committee Chairman Collin Peterson told corn growers in Washington this week that they will be lucky to get a year-long extension. The House Ways and Means Committee is reportedly looking at cutting the tax credit from 45 cents to 36 cents.
Members of the National Corn Growers Association meeting for their annual Corn Congress in the nation’s capitol made the VEETC extension a priority when they talked to their senators and representatives. NCGA President Darrin Ihnen says corn growers believe extension of the VEETC is vital to the industry. “As our board and voting delegates visited with members of Congress this week it was apparent that time is short and extension is in the best interests of the corn industry,” said Ihnen.
Senator John Thune (R-SD) pictured receiving the NCGA President’s Award from Ihnen during the Corn Congress events, had no specific public comments about support or lack thereof for the VEETC extension. “I look forward to continuing to work together on the Renewable Fuel Standard, supporting the move to E15, and other initiatives important to corn producers,” Thune said in a prepared press release.
There’s no question that Growth Energy’s proposal and the backlash by the rest of the industry has caused confusion on Capitol Hill, something that RFA president and CEO Bob Dinneen says is not good at this point in time. “Now is not the time to add uncertainty and complexity to the energy tax debate,” said Dinneen. “Because the EPA has failed to act to allow higher level ethanol blends, margins in the industry are razor thin. Losing the tax incentive now will shutter plants and cost tens of thousands of jobs. This is a serious discussion with real world implications.”
The groups fighting for the tax incentive extension note that they wholeheartedly support the goals of expanding infrastructure, increasing the number of blender pumps and flex fuel vehicles on the road. However, RFA says they are concerned that agreeing to phase out the VEETC would amount to unilateral disarmament in the fight for decreasing our dependence on fossil fuel, which has its own subsidies and tax incentives that no one is talking about eliminating.