Indications are that the Bush administration will make changes to the ethanol tariff in its budget to Congress scheduled to be released Monday. Earlier this week, Energy Secretary Sam Bodman hinted that the White House’s 2009 budget may propose scaling back or eliminating the 54-cent-a-gallon import tariff.

In a speech to the U.S. Chamber of Commerce, Bodman said, “I would just say I think that there are advantages to having had the kind of both subsidies and tariffs that have helped protect this industry. I believe that, the best I can tell, this industry is pretty close to being able to stand on its own.”

Senator Chuck Grassley (R-IA) issued a statement.saying that removing the tariff would ultimately result in subsidizing Brazilian ethanol. “I can’t figure out why Secretary Bodman would want the United States to risk becoming dependent on Brazilian ethanol when we’re already dependent on Middle East oil. His comments really do a disservice to President Bush who has been the most pro-ethanol president we’ve ever had,” Grassley said.

“In addition, the United States already provides duty-free treatment for Brazilian ethanol that is merely dehydrated in the Caribbean Basin Initiative countries. Brazil has yet to make full use of this program. I don’t see why we should bend over backwards to provide yet more duty-free treatment for Brazil’s ethanol producers.”