Big Oil needs no government help, says US ethanol group

29 June 2011 21:44  [Source: ICIS news]

INDIANAPOLIS (ICIS)--The US ethanol industry can live without government subsidies and so should big oil companies, the Renewable Fuels Association (RFA) said on Wednesday.

If ethanol is not entitled to government support, there is no reason why oil companies should receive their support either, said RFA president Bob Dinneen during a presentation at the International Fuel Ethanol Workshop (FEW) in Indianapolis.

“ExxonMobil does not need taxpayer money to drill in the Gulf of Mexico,” he told delegates.

Dinneen downplayed a recent vote in the US senate to eliminate tax incentives for US ethanol, saying the vote was not about ethanol, but rather about tax policy as a whole.

“[The vote] does not mean ethanol has lost all its support,” he said, adding that the industry scored two legislative wins in the US senate the same week it lost that vote.

But he acknowledged the shift in policy, and that Washington's views on ethanol appear to be changing.

Existing policies need to be reformed, and the ethanol tax incentive could be phased out as early as 1 August under a new deal being worked out in the senate, he said.

“It is not the package anyone here would want, but it is something,” Dinneen said, cautioning delegates not to assume the latest bill would go through.

It is difficult to get anything to the President’s desk, he said, comparing the legislative process on Capitol Hill to a game of rugby.

Dinneen said ethanol still has plenty of support from lawmakers in the US midwest, but continues to face opposition from members of congress who represent oil-producing states.

“Those folks really don’t get it,” he said.

Dinneen mentioned Okalahoma senator Tom Coburn as being particularly outspoken against ethanol, and also said California senator Dianne Feinstein seemed more interested in importing ethanol from Brazil than developing the US industry.

Coburn and Feinstein co-sponsored the amendment that was passed in the senate earlier this month that ended government support for ethanol.

The amendment was attached to a larger bill, which failed to leave the senate.

The FEW conference opened on Monday. The four-day event has attracted some 2,000 delegates to Indianapolis.

For more on ethanol visit ICIS chemical intelligence

By: William Lemos
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