11/10/2010

Allison Winter, E&E reporter

A group of Midwestern senators is pressing Senate leaders to include a broad new federal support system for biofuels in an energy bill that could come up for a vote as soon as next week.

Sens. Tom Harkin (D-Iowa), Christopher Bond (R-Mo.), Amy Klobuchar (D-Minn.) and Tim Johnson (D-S.D.) want Senate Majority Leader Harry Reid (D-Nev.) to extend a controversial ethanol tax credit and advance provisions aimed at expanding biofuels markets.

Their request, sent to Reid yesterday, indicates that a fairly narrow natural gas bill -- up for consideration in next week's lame-duck congressional session -- could become a target for a number of other proposals lawmakers want to eke out before Democrats lose numbers in the House and Senate next year. The natural gas bill is scheduled for a cloture vote next Wednesday.

Saying they are "deeply concerned" that marketplace limitations are constraining the growth of the biofuels industry, the senators vowed to work for bipartisan support of the bill if it contains provisions to help biofuels. They are pushing for "market expansion provisions," like federal support for flex-fuel vehicles or fuel pumps that could offer options for higher blends of ethanol.

"Quite simply, we need more vehicles that can utilize high percentages of ethanol and other biofuels, we need to develop pipelines to transport these fuels from their production sites to the largest markets, and we need to ensure that these high renewable content fuels are available at filling stations across the country," a letter from the senators says.

The lawmakers are also pushing for an extension of a controversial ethanol tax credit that would otherwise expire at the end of the year. The letter says the volumetric ethanol excise tax credit "deserves review" over the long term but asks for its continuation until other biofuels support systems are in place.

The senators estimate the policies could lead to a fivefold increase in ethanol's displacement of oil over the next 20 years.

Their efforts come at a critical time for federal ethanol support programs. The current ethanol credits are on the verge of expiring, and Congress has thus far been unable to extend a less costly and less controversial biodiesel tax credit that already expired last year.