Brown-Waite Bill Would Lift Ethanol Tariff.
Lifting the tariff of 54 cents on every gallon of imported ethanol would encourage foreign producers to ship more of the fuel additive here, which would allow refineries here to increase production.
Brown-Waite Bill Would Lift Ethanol Tariff.v
By TONY MARRERO
Published: June 5, 2008
BROOKSVILLE - U.S. Rep. Ginny Brown-Waite has introduced a bill that would remove the tariff on ethanol imported into the United States.
It's a surefire way to help ease the pain at the pump, the Brooksville Republican contends. Lifting the tariff of 54 cents on every gallon of imported ethanol would encourage foreign producers to ship more of the fuel additive here, which would allow refineries here to increase production.
The move increases ethanol shipments to the U.S. "virtually overnight," providing relief in the short term to high gas prices, said Brown-Waite, who introduced H.B. 6183 on Wednesday evening.
She also contends the move would help lower food prices by allowing Midwestern corn farmers who have diverted their crop for ethanol production to use more for cattle feed and human consumption.
Ethanol is an alcohol fuel produced by fermenting simple sugars. It's usually blended in gasoline to increase octane, improve combustion and extend gasoline stocks.
The demand from refineries for the fuel additive has grown in recent years and that growth is expected to continue. In 2005, Congress required a ramping up of ethanol use to 7.5 billion gallons by 2012.
Most of the U.S. market is supplied by domestic refiners producing ethanol from American corn. Production costs tend to be significantly lower in other countries. Brazil, for example, can produce ethanol for about half of what it costs to do it here, according to a Congressional Research Service report.
"In many cases, this tariff negates lower production costs in other countries," the report states, noting that in 2007, imported ethanol represented roughly 6 percent of U.S. consumption.
Brown-Waite said she has only just begun to solicit support from fellow lawmakers. Some voiced support back in 2006 when President Bush suggested the tariff should be lifted.
She acknowledged that the bill, which is headed for the House Ways and Means Committee, faces an uphill battle.
Lawmakers in farm states have vigorously defended the tariff. They worry that cheap foreign ethanol would hurt U.S. farmers. The opposition includes legislators from both parties and both chambers.
"When President Bush proposed it, we weren't paying four dollars a gallon," Brown-Waite said.
There have been clear signs the sentiment hasn't changed. Recently, Federal Reserve Chairman Ben Bernanke said he supported doing away with the tariff to help reduce corn prices. Nebraska Congressman Ben Nelson responded to that announcement by declaring the tariff would be lifted "over my dead body," according to news accounts.
It's disingenuous to suggest lifting the tariff would hurt family farms, Brown-Waite said. Instead, she said, it would cut into the profits of agribusiness giants.
"This isn't Ma and Pa Kettle we're talking about," she said.
She noted the last paragraph of the CRS report, which concluded that while low-cost ethanol "could affect the U.S. ethanol industry and American corn growers … the U.S. ethanol industry has grown significantly in the past several years, and will likely continue to grow regardless of the level of imports."
The push to lift the tariff is "a solution in search of a problem," Matt Hartwig, spokesman for the Renewable Fuels Association, wrote in an e-mail to Hernando Today. The RFA represents domestic ethanol producers.
The tariff exists mainly to offset a 51-cent tax incentive — essentially, a subsidy — that ethanol producers, foreign and domestic, get for every gallon of pure ethanol they make, Hartwig said. So lifting the tariff would be giving a bigger break to foreign companies.
"Removing the tariff won't have an impact on food prices, gas prices or any other problems that proponents of removing the tariff often cite," he said. "Rather, it would take American taxpayer dollars and send them overseas. Frankly, we are already doing far too much of that in the form of our dangerous addiction to foreign oil."
Congress will have to deal with the question this year either way: The tariff expires at the end of 2008 unless lawmakers extend it.
Reporter Tony Marrero can be reached at 352-544-5286 or lmarrero@hernandotoday.com. |
