Sen. Charles Grassley, R-Ia. has introduced legislation that would sharply reduce the federal subsidy for ethanol over the next two years and then tie it to the price of oil thereafter. The current 45-cent-per-gallon tax credit is scheduled to expire at the end of this year.
Grassley’s proposal would...
Grassley’s proposal would...
- cut the credit to 20 cents in 2012 and to 15 cents in 2013. Thereafter through 2016 the credit could be as high as 30 cents if the price of oil is $50 a barrel or below but would fall as crude prices rise.
- provide tax credits for retrofitting service stations to dispense higher blends of ethanol.
- reduce the tariff on imported ethano from the current 54 cents a gallon to 20 cents in 2012 and then to 15 cents through 2016.
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