Ethanol industry group Growth Energy on Thursday called on the U.S. Congress to redirect government subsidies for ethanol to pipeline builders, gas station owners and farmers to create a new infrastructure.
Part of the federal fuel excise tax is now given to gasoline blenders, typically the refineries, to encourage them to include up to 10 percent ethanol.
Ethanol makers say their fuel sells for less than gasoline, without the subsidy, and could compete just fine, but there's no way for the public to buy and consume it directly.
Growth Energy called for the excise tax money to be used as incentives for retailers to install 200,000 blender pumps and loan guarantees for ethanol pipelines. It also called for a federal mandate on automakers to make all vehicles flex-fuel, so they can run on 85 percent ethanol fuel.
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Once that happens, said Tom Buis, CEO of Growth Energy, the subsidy can be phased out.
Growth Energy is proposing that the provision be inserted into an energy bill being discussed this year.
Many of the ethanol subsidies will expire at the end of the year. Attempts to renew them has drawn increasing opposition from environmentalists, some budget conservatives and some in the oil industry.