Will Congress renew ethanol subsidy?

Published 10:18 am Monday, September 20, 2010

By Mark Steil, Minnesota Public Radio News

WORTHINGTON — The next few months are likely to be critical for the ethanol industry as two key subsidies for the alternative fuel expire in December — and it’s unclear if Congress will renew them.

One subsidy, called the blenders credit, pays refiners to mix ethanol into their gasoline. The other limits competition from ethanol imports. Together the two cost taxpayers about $6 billion a year.

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So far Congress hasn’t shown much interest in renewing the subsidies, which date back decades. That’s a big change from just a few years ago, when ethanol was Washington’s alternative fuel of choice. In 2006, the fuel rated a mention in President Bush’s State of the Union speech.

“We’ll also fund additional research in cutting edge methods of producing ethanol — not just from corn, but from wood chips and stalks or switchgrass,” Bush said then.

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