Iowa Senator Says What's Fair for Oil Should Be Fair for Ethanol.

Grassley calls out colleagues on Senate Floor.

Published on: Dec 3, 2010

Senator Chuck Grassley, R-Iowa, has challenged the thinking of those Senators who sent a letter to the majority and minority leaders earlier this week expressing their opposition to extending the tax incentives for home-grown ethanol.

During a speech on the Senate floor, Grassley said, "I'd like to remind my colleagues of a debate that we had earlier this year on an amendment offered by Senator (Bernard) Sanders (I-Vt.). Sanders' amendment would have repealed the $35 billion in tax subsidies enjoyed by oil and gas. Opponents of the Sanders amendment argued that would reduce domestic energy production and drive up our dependence upon foreign oil. It's intellectually inconsistent to say that increasing taxes on ethanol is justified, but it's irresponsible to do so on oil and gas production. 

Grassley asked his colleagues that if tax incentives lead to more domestic energy production and the result is good-paying jobs, why are only incentives for oil and gas important, but not for domestically produced renewable fuels?

"It's ridiculous to claim that the 30-year-old ethanol industry is mature and thus no longer needs the support they get," Grassley said. "Meanwhile the century-old big oil industry still receives $35 billion in taxpayers' support."

Grassley says allowing the ethanol tax credit to expire will raise taxes on producers and blenders and prices at the pump by five cents a gallon at a time when so many consumers are struggling, and when ethanol is 10% of the fuel supply.

"If we allow the tax incentive to lapse from where should we import an additional 10% petroleum?" Grassley said. "Should we rely on Middle East oil sheiks or Hugo Chavez? I'd prefer to support renewable fuels producers based right here at home rather than send them a pink slip."

Grassley charged ending the ethanol tax breaks will cost over 100,000 U.S. jobs and directly contradict a pledge by many in his own party not to pass job-killing tax hikes during a recession.