Bipartisan Senate bill seeks lower tariffs on ethanol imports

The New York Times
March 19, 2009
By BEN GEMAN

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A bipartisan group of senators is seeking to lower U.S. tariffs on ethanol imports to achieve "parity" with the blender's credit, which was reduced in last year's farm bill.

The farm bill knocked the blender's credit from 51 cents per gallon to 45 cents per gallon. A new Senate measure (pdf) is aimed at knocking down the 54-cent-per-gallon import tariff and the 2.5 percent ad valorem tariff to achieve "parity" with the lowered blender's tax credit.

Sen. Dianne Feinstein (D-Calif.), one of the sponsors, said in a statement that the higher import tariff creates a barrier for sugarcane-based ethanol from Brazil, and hence gives gasoline imports a "competitive advantage."

"I believe this makes no sense -- particularly given our nation's continued addiction to oil imported from the Middle East and other hot spots, as well as the volatility of global markets for the fuels we put in our cars," she said.

The bill was introduced yesterday by Sens. Dianne Feinstein (D-Calif.), Judd Gregg (R-N.H.), Jeff Bingaman (D-N.M.), Susan Collins (R-Maine), Maria Cantwell (D-Wash.) and Mel Martinez (R-Fla.).

Collins and some other backers cast the bill in environmental terms. She noted in a prepared statement that the import tariff "creates a trade barrier to ethanol produced from sources like sugarcane, which is less greenhouse gas intensive than ethanol produced from corn."

The backers also said the bill, by making ethanol imports cheaper for U.S. refiners, would in turn help lower prices at the gasoline pump.

EPA asked to stand put on 'indirect' land-use changes

Meanwhile, environmental groups are urging EPA not to retreat from its plans to weigh greenhouse gas emissions from "indirect" land-use changes linked to increased biofuels production.

At issue are upcoming EPA rules to implement the expanded renewable fuel standard, which under a 2007 law reaches 36 billion gallons of ethanol and other biofuels in the U.S. fuel supply by 2022. The 2007 law requires that biofuels have sharply lower levels of lifecycle greenhouse gas emissions than conventional fuels.

Ten environmental groups sent a letter to EPA administrator Lisa Jackson saying the rule should include measurement of emissions from indirect land-use changes -- such as new land clearing in response to use of existing cropland for fuel feedstocks -- linked to production of various types of biofuels.

Some biofuels industry officials and lawmakers have been pushing EPA not to make these calculations in the upcoming rule, arguing that the science is not advanced enough yet (E&ENews PM, March 16).

But the environmentalists' letter to EPA says this would mean assigning a "zero value" to indirect land-use change, which they say would be a harmful decision. "A zero value is equivalent to assuming that land is limitless, and that agriculture can expand infinitely without any secondary damage. This flies in the face of common sense and is not a reasonable response to technical uncertainties in the analysis," states the letter from the Wilderness Society, the Natural Resources Defense Council, Defenders of Wildlife and other groups.

"A zero value for indirect land use would send the wrong signal to the market, and would encourage ventures that increase global warming pollution and will fail once the lifecycle accounting accurately and completely addresses the impact of land use changes," it adds.

For more news on energy and the environment, visit www.greenwire.com.

NOTICE: In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving this information for research and educational purposes.

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