Let the Fight Begin

By Bob Dinneen | April 15, 2010
The ethanol industry has long known that 2010 would be almost singularly focused on extending the critical tax incentives for all ethanol, regardless of feedstock. The Renewable Fuels Association has expended large amounts of shoe leather educating our friends on Capitol Hill about the critical need for long term extensions of these important public policies. That work has now paid off in the form of legislationH.R. 4940, the Renewable Fuels Reinvestment Act. But simply getting a bill is just the beginning.

The importance of this bill cannot be understated. As written, H.R. 4940 would provide the following critical extensions of these four tax incentives available for ethanol use and production:

>The Volumetric Ethanol Excise Tax Credit through Dec. 31, 2015.

>The corresponding secondary tariff on ethanol through Dec. 31, 2015.

>The Small Producers' Tax Credit until Jan. 1, 2016.

>The Cellulosic Ethanol Producer Tax Credit until Jan. 1, 2016.

These important policies remain the underpinnings for the continued growth and evolution of America's ethanol industry. In a report recently released by the RFA, allowing VEETC and the secondary tariff to expire would force 112,000 Americans out of work and shutter nearly two out of every five ethanol plants operating today. Moreover, a failure to extend just these two incentives would chill investment in new, cutting edge technologies that are on the cusp of commercialization.

Extending these tax incentives must be the top priority of the ethanol industry, and is certainly the focus for the RFA. It will take the collective efforts of all the industry and its allies to get this legislation passed.

The benefits of ethanol production are well-documented. America's ethanol producers help support nearly 400,000 jobs, providing tens of billions of dollars in economic opportunity for small, rural communities all across the country. The use of 10.6 billion gallons of ethanol last year alone displaced enough oil to replace Venezuelan imports for 10 months, saving the country more than $16 billion.
These benefits, and those that will come from the continued evolution and deployment of new ethanol technologies, could disappear. Failing to extend these import provisions will add a reliance on imported ethanol to our dependence on imported oil.

Let me be clear, the extensive war chests and influence of Big Oil, Big Food, Big Livestock and Big Environmentalists are all aligned to stand in our way. They have already unleashed their hounds and will stop at nothing to prevent this legislation from becoming law. A group of ethanol naysayers, including the National Petroleum and Refiners Association, Friends of the Earth, Natural Resource Defense Council, American Meat Institute, and our friends at the Grocery Manufacturers, came out swinging. In a joint release, these groups used phrases like "dirty corn ethanol" and "throwing good money after bad" in an attempt to group ethanol in with other technologies that have lost favor on Capitol Hill.

We all know their rhetoric rings hollow. This kind of firebrand speech is the last resort when facts do not support your position. But make no mistake, this is a formidable opposition with deep pockets and an even deeper commitment to the status quo. They will not go quietly into any good night.

That is why we must answer their charges with one voice, supported by sound analysis and facts. We must not let a cacophony of castigators dictate this discussion.

It is incumbent upon anyone believing in the potential of ethanol and American agriculture to make their voice heard. Call your member of Congress (you can find contact information at www.house.gov). Let them know that you want to protect American jobs and grow our energy security.

Winning this battle will not come easy. Let the fight begin.