RFA, Other Ethanol Backers Differ With Growth Energy

Spokesman for RFA says ideas are worth discussion, but there isn't time in this session and there's danger that dragging out talks will mean current incentives expire.

Published on: Jul 16, 2010

The Renewable Fuels Association was noticeably absent from a press conference rolling out Growth Energy's proposal for a shift in national ethanol policy on Thursday in Washington, D.C.

The RFA, along with the American Coalition for Ethanol, Farm Bureau and producers groups issued an immediate press release stating their support for an extension of the current tax incentive structure.

But that does not signal an irreparable split in the industry, says RFA spokesman Matt Hartwig.

Hartwig says the RFA is not even necessarily opposed to the strategy change proposed by Growth Energy. Rather, he says, the organization declined to join in supporting the opening of that discussion because it believes there simply isn't time to finish it before the end of this session of Congress.

"There are less than 30 days of session time left," Hartwig points out. "We think a better course of action is to push for an extension of the current structure and leave the discussion of how to tweak that structure for the next session when there will be more time for all ideas to be heard."

He says RFA and the supporters of its position believe that the worst possible outcome is for the current tax incentives to simply expire with no action in Congress.

"We are very concerned that is actually what will happen if the issue becomes too confused," Harwig said. "When we initially announced our support for the senate bill extending the current incentives, Growth Energy was with us. I don't know why they decided to take a different course now, but we feel the best strategy is to stick with finishing what we have already started."

He says the entire industry supports expanding infrastructure and RFA absolutely supports a requirement for all new vehicles sold in the United States to be flex fuel vehicles, which are the key goals Growth Energy would like to see pushed.

But there is disagreement that it should be done by shifting existing support away from driving demand, he says.

"This country still has huge subsidies in place that favor the petroleum industry," he says. "We believe the discussion of how to promote renewable fuels needs to have that reality on the table as well. And we think this is not the time to add complexity and uncertainty to the issue. We feel that an extension of the existing credit is essential."

Growth Energy's proposal was not to end the existing credit, but simply to shift the focus away from a credit for blenders and toward a credit for blender pumps and flex fuel vehicles, a strategy it says could lead to an end to the need for government support in the future.

"That's just one of a lot of ideas about how to move down the road," Hartwig said. "We don't oppose the discussion. Our concern is that the timing isn't right."