Monday, February 21, 2011

House votes to block 15% ethanol fuel and station subsidies are warning signs in budget battle

The biofuel industry's push for increasing the ethanol limit in gasoline from 10 to 15 percent hit a speed bump last week when the House of Representatives added a provision to its budget-cut bill that would block the Environmental Protection Agency from approving E15 fuel. "That House vote on ethanol is hardly the last word on the issue, because the broader legislation faces strong opposition from the Democratic-controlled Senate and the White House," Philip Brasher of The Des Moines Register reports. "But the bipartisan, 285-136 vote to stop the increased use of ethanol does demonstrate the challenges the industry faces in preserving its government incentives. Some 79 Democrats joined 206 Republicans in voting for the measure."

The vote was seen as largely symbolic, since the Senate is almost sure to vote down the spending bill, but also a warning sign. The House also approved an amendment that would block subsidies for service station pumps that can dispense varying amounts of gasoline and ethanol. The defeats show the industry "there is a lot of work to be done to educate members of Congress," Monte Shaw, executive director of the Iowa Renewable Fuels Association, told Brasher. Supporters of the anti-ethanol provision included gasoline refiners, auto makers, livestock producers and food companies. "Every American who owns a car, light-duty truck, motorcycle, snowmobile or outdoor power equipment will benefit by the House vote that has the effect of blocking the sale of gasoline containing 15 percent ethanol, known as E15," said Charles Drevna, president of the National Petrochemical and Refiners Association. (Read more)

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