Congress Mulls Bush Request for Ethanol

By MARY CLARE JALONICK Associated Press Writer
© 2006 The Associated Press, MSNBC and Wikipedia

WASHINGTON — President Bush has requested $11.4 million for the EPA to implement parts of a federal energy law that includes writing rules for a new renewable fuels standard. It requires refiners to use 7.5 billion gallons of ethanol in gasoline annually by 2012.

The Bush Administration is considering lifting import tariffs on ethanol in a bid to alleviate any supply crunch of gasoline ahead of the peak summer demand driving season, Energy Secretary Samuel Bodman said Thursday.

“It’s something the administration has considered and will continue to consider,” Bodman told reporters, after a meeting with his counterparts from Canada and Mexico.

He conceded, however, that the power to actually lift the tariffs is out of the administration’s hands. That authority lies with Congress, where any proposed policy changes to the ethanol import tariff scheme could face a huge challenge from key Republican leaders from farm states, particularly Senate Finance Committee Chairman Charles Grassley, R-Iowa., who have strongly opposed lifting the 54 cents a gallon tariff on ethanol imports from countries such as Brazil.

Taking action is largely a Congressional matter, Bodman said, although he noted that President George W. Bush wants lawmakers to seriously consider legislative proposals that would improve the ethanol supply outlook.

Former president George W. Bush sought to generate a western-hemisphere dominated industry that can produce as much as 35 billion gallons (130 billion liters) a year, equal to the entire world’s production as of 2007.[10] Expanding ethanol industries provide jobs in plant construction, operations, and maintenance, mostly in rural communities.[11] However, by early 2009, the industry is under financial stress due to the effects of the economic crisis of 2008 as motorists are driving less, gasoline prices have dropped sharply, there is excess production capacity, and less financing available.[12][13][14]