Ethanol industry plots post-tax credit strategy

In Washington, the Des Moines register is reporting on changes in tactics by the USDA and the ethanol industry, in response to the US Senate passing an amendment that would halt the ethanol tax credit as of July 1.

Senator Chuck Grassley of Iowa said that ethanol supporters are looking for a piece of legislation that will pass in 2011, to which the Thune-Klobuchar Bill can be attached as an amendment, and are looking closely at the bill for the Federal Aviation Administration. (By tradition, spending bills originate in the House, and the Senate is limited to amendment). The Thune-Klobuchar bill proposes to end the ethanol tax credit, apply $1B in savings towards the deficit, and apply the remainder to blender pump incentives to increase market access for ethanol.

At the same time, the USDA is moving to approve blender pump assistance packages before September 30th, when its 2011 budget authorization ends and a potential cut-off in blender pump funds takes effect.

http://www.desmoinesregister.com/article/20110619/BUSINESS01/106190321/-1/AMES/Ethanol-producers-cave-agree-let-Congress-end-subsidy