Tax on Imported Ethanol Extended Through 2009
A key legislation which purpose was primarily to encourage domestic production of ethanol, discourage dependence on foreign energy and circumvent other countries from competing with United States past last December.
This is a boon to U.S. farmers, producers and others with a stake in the ethanol industry, granting them three more years of less competition from foreign imports of this source of renewable fuel.
This tax provision was prefixed to expire in October 0f 2007 but will continue in effect until January 2009; thanks to the effort of Senator, John Thune (South Dakota) and others. The provision included the continuing of the 54-cent per gallon tax on imported ethanol.
Interestingly, the essential features of the provision ran perpendicular to the wishes of President Bush, who was leaning towards a temporary reduction of the import tax on ethanol.
"I think it make sense... when there's a time of shortage of a product that's needed, so consumers have a reasonable price, it seems to me it makes sense to address those shortages," Bush remarked some time last year. "And dropping a tariff will enable the foreign export of ethanol into our markets, which will particularly help on our coasts", Bush added.
Encouragingly, the United States produced about 5 billion gallons of ethanol last year and more plants are being built.
In the event demand trumps supply, Brazil, the world's lending producer of ethanol could be the most likely source of imports. However, Brazil and other ethanol producing countries have their own supply issues and it is unclear how much fuel could be made available.
"They can already get a certain amount in. But this at least will ensure there will not be a huge flood of imported ethanol coming in from Brazil or some place else when we're trying to nurture this industry," remarked Senator Thune.
The senator voiced a widespread concern in the industry: that one of the main problems isn't the shortage of ethanol but of transportation. "I don't think there's going to be a supply issue. The one thing we have to develop is the distribution system," he said.
A key factor that lead to the extension of the imported tax on ethanol is the anxiety shared by some key industry individuals: mainly, what they referred to as the unfair advantage other countries have in producing ethanol.
Doug Somke of Conde, president of the South Dakota Farmers Union said, " if other countries are competing on the same playing field as we are, that's one thing. But when they're not, that's a whole different issue."
留言列表
