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Allowing ethanol tax incentive to expire would risk jobs, RFA’s Dinneen says


“Allowing the [ethanol] tax incentive to expire would risk jobs in a very important domestic energy sector and across rural America,” said Bob Dinneen, president and CEO of the Renewable Fuels Association in a teleconference today addressing how ethanol could be affected by the outcome of last night’s election results.


“It is clear there will be a renewed focus on reining in spending and reducing taxes,” Dinneen said of the 112th Congress. He added that “there will have to be a robust debate about how best to assure the continued growth and evolution of the ethanol industry, how to effectively attract capital to cellulosic ethanol technologies [and] how to commercialize other advanced biofuels like algae and butanol.”


Dinneen said that the debate should include whether and how tax policy for all fuels, including petroleum, is addressed. “The ethanol industry, and the domestic biofuel industry as a whole, ought not to be asked to unilaterally disarm while extensive government support continues for petroleum companies.”


The ethanol tax incentive is due to expire on December 31, 2010. If it is left to expire, discretionary blending could evaporate, resulting in job loss, Dinneen suggested. In addition, ethanol demand could fall immediately as long-term contracts for ethanol no longer exist. Ethanol today is a spot market business, Dinneen told the media.


While the ethanol industry will face a challenging climate in the new Congress, Dinneen said there will be opportunities as well, if industry advocates continue to focus on jobs; and the connection between increased ethanol use and reduced energy imports and a growing economy. Advocates also need to show how ethanol production and use can save taxpayer money by increasing tax revenues and reducing farm program costs.

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