The South Dakota Corn Growers Association praised a bill introduced by Sen. Chuck Grassley (R-IA) and co-sponsored by Sen. Tim Johnson (D-SD) that would tie ethanol tax breaks to the price of oil.
SDCGA President Gary Duffy of Oldham said the bill, which would adjust incentives as oil prices change, is a fair plan.
“This is a reform tax incentive that will be used only when needed,” SDCGA President Gary Duffy of Oldham said. “It’s responsible and it provides a safety net for our largest renewable-energy industry.”
The bill would convert the 45-cent credit into a variable credit that would adjust based on the price of oil. The credit, which helps the corn ethanol industry, is set to expire this year. That type of transition is what the industry is asking for, Duffy said.
The bill also would improve tax credits for the installation of blender pumps that offer higher-percentage ethanol blends. Infrastructure and access to the market are an important focus, Duffy said.
“You need to have the infrastructure in order for people to use the product. It makes the industry more stable by giving the people the choice of using a homegrown fuel versus one from foreign countries,” he said. “It becomes a matter of consumer choice, but you have to have the infrastructure in order for that to happen.”
Joining Grassley and Johnson as co-sponsors of the Domestic Energy Promotion Act of 2011 are Sens. Kent Conrad (D-ND), Mike Johanns (R-NE), Amy Klobuchar (D-MN), Al Franken (D-MN), Tom Harkin (D-IA), and Ben Nelson (D-NE).