Grassley Ready to Defend Ethanol Import Tariff

The 54-cent-per-gallon tariff charged on imported ethanol is scheduled to expire at the end of 2010, and long-time supporter Sen. Chuck Grassley (R-Iowa) says renewal of the controversial duty could face a greater battle than in the past.

The 54-cent-per-gallon tariff charged on imported ethanol is scheduled to expire at the end of 2010, and long-time supporter Sen. Chuck Grassley (R-Iowa) says renewal of the controversial duty could face a greater battle than in the past.

Speaking with reporters earlier this week on a wide range of legislative topics, Grassley said, "I think in 2010 about the only thing that might be controversial and difficult to maintain would be … the ethanol import duty" and that he would "fight to maintain it."

Both the ethanol import tariff and the ethanol tax incentive are set to expire at the end of the year. One industry analyst said he expects "the tariff to be reduced to dovetail with the tax credit, and I would not be surprised if the tax credit were to be renewed at a lower level than the current 45 cents a gallon."

In a related action, a coalition of oil companies, car and engine manufacturers and fuel sellers has asked the Obama administration not to increase the amount of ethanol blended into gasoline based on inadequate test data. "We are writing to express our concern that [the Environmental Protection Agency] may decide to allow E15 based on limited or inadequate data," the group said in a letter to agency head Lisa Jackson. "We urge EPA to base its decision on a complete and sound scientific record."

The agency already said it was waiting until this summer, so it can review test data on how a higher ethanol-gasoline ratio would affect engines. Initial tests showed vehicles built after 2001 would likely be able to handle E15, the agency said.

However, the coalition said EPA needs to assess the effects of E15 on the existing automobile fleet, motorcycles and non-road equipment as well as retail gasoline station pumps and storage tanks.

"As you proceed with important decisions that could affect the long-term success of ethanol and possibly other biofuels in the U.S. market, it is imperative that those decisions be based on a complete understanding of the potential impacts of increased levels of ethanol on all segments of the end-user market," the coalition of 14 trade groups said.

It also said EPA should reopen the E15 comment period so the public can review the new test data and that the Energy Department should spend all the $15 million approved by Congress for research on increasing ethanol-blend levels.

The coalition includes the Alliance of Automobile Manufacturers, American Petroleum Institute, Motorcycle Industry Council, Boat Owners Association of the United States and the National Association of Convenience Stores.

The Renewable Fuels Association, the trade group for ethanol producers, says EPA should go ahead and approve intermediate ethanol blends, such as gasoline with 12 percent ethanol, while the agency completes its testing on E15.

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