The U.S. Senate surprised some people by passing a bill last week that would end the ethanol credit to ethanol producers, beginning July 1. The one thing for certain is that if the house concurs, the ethanol industry and alternative fuels will be affected, at least in the short term. Until now, the extra credit has helped ethanol plants remain competitive with petroleum products.
A flurry of emails announced the vote. Some were very disappointed in their language-such as coming from the National Corn Growers Association. They see it as a move away from the administration supporting the alternative energy scene. Demand for corn through production of ethanol is one reason that the big corn crops have been handled and prices have shot to record levels, despite production of record crops, except last year.
The president of the national Farmer Union, from California, says that this loss of incentive will come back to impact the ethanol market in a negative way. He sees higher fuel prices for all Americans if this legislation makes its way through the U.S. House and becomes law.
Not everyone is upset if the tax break goes away, however. Ernie Brames, a Huntingburg, Ind., farmer and hog producer, has lobbied for months to anyone who would listen that it wasn't fair for pork producers. Ethanol was driving up feed costs. Yet when the pork industry was in the doldrums with $8 per hundredweight market hogs in the late 90's, Congress did nothing to step out and help them.
"All we want is a level playing field," Brames says. "When a direct competitor for a product we must buy- corn- is getting a tax break and we're not, the playing field is not level."
Meanwhile, it's likely no surprise that Friends of the Earth, an environmental group, thought the elimination of the rebate would be a good thing. Their goal is not so much to back alternative fuel, but to get rid of what they believe are dirty fuels and energy sources. Their slogan spelled out on a big banner members held so Congress could see it, was 'Save taxes and the planet- stop federal support of dirty Ethanol.
Meanwhile, the National Wildlife Federation ran a press release claiming that on top of its ethanol action, the Senate is also slashing a billion dollars out of programs that help wildlife. They find that ironic in a day and age when so many people talk about supporting alternative fuels.