Ethanol subsidies could be early test of campaign promises to cut federal spending

Federal subsidies for ethanol may be among the first tests for the Republican-controlled House of Representatives to follow through on promises to cut federal spending. "Efforts to secure extensions for a tax credit for blending fuel with ethanol and an import tariff for ethanol -- both set to expire at the end of year -- have faced stiff opposition in Congress, but industry players are planning to continue their push for the provisions during the lame-duck session," Dina Fine Maron of Environment & Energy Daily reports. If that push fails, fewer ethanol supporters will be in Congress come January to champion its cause.

Democrats including Senate Agriculture Committee Chairwoman Blanche Lincoln and ethanol boosters on the House side including Reps. Stephanie Herseth Sandlin and Earl Pomeroy lost their seats Tuesday, Maron writes. Industry groups maintain the ethanol subsidies are a regional issue, not a partisan one, hoping the seats will be filled by other ethanol supporters. "Those who were defeated were replaced with equally strong advocates," Bob Dinneen, president of the Renewable Fuels Association, told reporters yesterday.

Tom Buis, CEO of Growth Energy, said it remains to be seen if tea party-backed newcomers will dampen efforts to net ethanol credits. "The ethanol tax credits actually should be viewed as an investment -- an investment that provides great return in jobs and payments to farmers as well as reductions on the tremendous amount we pay for foreign oil," he said. Heather Taylor, director of the Natural Resources Defense Council Action Fund, countered, "If the new folks coming in really want to talk about cutting federal spending, this needs to be a place where they are seriously looking." (Read more, subscription required)