Ethanol Added Pump

Up for vote in the U.S. Senate is a deficit-cutting bill already passed by the House of Representatives that will curb federal spending by $60 billion this year while also preventing the EPA from increasing the percentage of ethanol in gasoline from 10 percent to 15 percent and handing out subsidies for gasoline stations being retrofitted to sell the E15 blend. The combination is creating some interesting political conflicts.

Long-time biofuel supporter Senator Chuck Grassley of Iowa, for example, has had to publicly restate his priorities: cutting the national deficit now comes before support for the ethanol industry. He told the Des Moines Register, "As significant as it is to me because I'm a great ethanol fan, if in fact those things were in the bill to cut the deficit... I'd have to bite the bullet." That is a pretty significant statement, especially considering that Iowa is responsible for about 30 percent of America's ethanol production. By contrast, Iowa Senator Tom Harkin along with the state's two House Republicans oppose the ethanol provisions. According to Harkin, "Blocking funding for expanding ethanol use to E15 blends not only does not save any significant funding, it takes us backwards on energy security by making us more dependent on foreign imports."

Growth Energy CEO Tom Buis thinks Congressional support for ethanol is faltering due to anti-ethanol campaigns that claim ethanol production is to blame for rising food prices. Maybe, but a lot of Republicans like Grassley are being pushed from the right to make the budget the political issue, and some ethanol support might be one casuality of that push.

[Source: Des Moines Register]