Senate vote doubles ethanol requirement

Provision in energy bill requires 8 billion gallons of fuel be added by 2012

June 16, 2005|By Richard Simon and Warren Vieth | Richard Simon and Warren Vieth,LOS ANGELES TIMES

WASHINGTON - For years, Congress has showered tax breaks on ethanol, portraying the fuel that is derived mostly from corn as a home-grown alternative to oil imports.

But even the Corn Belt might not have imagined how good times could get, as the Senate yesterday voted to double the amount of ethanol, to 8 billion gallons, that must be added to the United States' gasoline supply by 2012.

"The Senate is poised to make ethanol a cornerstone of America's energy policy," said Sen. John Thune, a Republican from ethanol-producing South Dakota.

The provision, added to the energy bill by a strong bipartisan vote of 70-26, is widely regarded as critical to motivating Congress to complete the first overhaul of energy policy in a decade, a top priority of President Bush.

Opponents of the provision, including East and West Coast senators and the oil industry's trade association, the American Petroleum Institute, contend that the cost of transporting ethanol from the Midwest could increase gasoline prices.

Sen. Charles E. Schumer, a New York Democrat, called the mandate "nothing less than an ethanol gas tax" levied on every motorist in the country.

"There is no sound public policy reason for mandating the use of ethanol, other than the political might of the ethanol lobby," Schumer said.

The 8 billion-gallon-mandate is higher than any amount that has come before Congress and would give the industry its biggest boost since Congress approved a tax break for the fuel in 1978.

Bush applauded efforts to boost the ethanol requirement, saying it was an important element of a broader strategy to reduce the nation's dependence on foreign oil.

Bush said it was important for Congress to approve a renewable-fuel standard requiring a minimum amount of ethanol and biodiesel, which can come from soybeans as well as from recycled waste products such as cooking grease.

The president prodded the Senate to set aside partisan politics and pass an energy bill quickly, saying the public's patience, not to mention his own, was wearing thin.

The energy bill passed by the House in April would require 5 billion gallons of fuel from renewable sources to be added to gasoline by 2012, virtually ensuring that an ethanol mandate of some amount will be in the final bill.

The National Corn Growers Association urged its members to send gas receipts to senators with messages written on the back asserting that increased ethanol use would help prevent spikes in gas prices.

But the effect increased ethanol use would have on gas prices is disputed. Some have suggested that increased ethanol use would lower gas prices, mainly because ethanol is so plentiful that its price is cheaper than that of gas.

But Ed Murphy of the American Petroleum Institute said, "If there was an opportunity for people to increase their market share right now by adding ethanol to gasoline and undercutting your competition by a fraction of a cent a gallon, people would be banging at the door to do it."

Opponents of ethanol use contend that it would raise gas prices because ethanol cannot be transported through pipelines and much of it must be shipped by barge or train from the Midwest to the coasts.

The Los Angeles Times is a Tribune Publishing newspaper.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.