Call for Ethanol Support Phase Out

Growth Energy, a coalition of 61 ethanol production plant members and about 17,000 ethanol supporters, has proposed an eventual phasing out of federal support for ethanol in return for investments in infrastructure that will give consumers the freedom to choose their fuel.

In a teleconference this week, Tom Buis, CEO, Growth Energy, said that in almost every visit that he and others make on Capitol Hill, they get the question, “How long are we going to have to rely on government subsidies [for ethanol]?”

“We no longer have a problem in producing ethanol. In fact, we are overproducing more than the government regulations will allow us to do. Our challenge is the infrastructure barriers that prevent us from competing in an open marketplace. Oil has a 90 percent monopoly. We need to break the monopoly,” Buis said.

Growth Energy’s Fueling Freedom Plan calls for the redirection and eventual phase out of government support. It proposes mandatory flex fuel vehicle production and tax incentives for retail fueling stations to install blender pumps.

Buis said that automakers have said they would build more flex fuel vehicles if there were more retailing stations to provide more ethanol blends. At the same time, retailers say they need more flex fuel vehicles to justify the investment in installing the hardware for blender pumps.

“With this plan we say 'the buck stops here.' We can eventually get to a position without government assistance,” Buis said, adding that government support for building out infrastructure in the U.S. has a long and rich tradition, citing railroads, canals, highways, water systems, electricity and more.

“We think building out the infrastructure to reduce our dependence on foreign oil is long overdue,” Buis said. Infrastructure improvements that will allow consumers to choose their fuel is “a great investment for America and Americ an taxpayers,” Buis said.

The Fueling Freedom Plan proposes that funds currently going to the oil industry as an incentive for blending ethanol into gasoline would be redirected to provide backing for tax credits to retailers for installing blender pumps and ethanol pipelines.

It also proposes that all automobiles sold in the U.S. be flex fuel vehicles. Growth Energy says this would require no additional cost to taxpayers and a minimal cost (about $120 per vehicle) to vehicle manufacturers.

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