Congressmen Mark Udall (D-Eldorado Springs) and Ed Perlmutter (D-Golden) have introduced a bill to facilitate the importation of ethanol by lowering the tax on ethanol coming from other countries.
The bill, entitled the Ethanol Importation Facilitation Act, would reduce that tax -- the ethanol import tariff – from 54 cents per gallon to 45 cents per gallon. The effect would be to restore the balance between that tariff and the tax subsidies provided to ethanol producers.
Historically, the tariff was imposed so that foreign producers would not benefit from the tax subsidies. But recent legislation reduces the subsidies without reducing the tariff – so without the change that would be made by the Udall-Perlmutter bill, the tariff will be changed into a trade barrier that will make it even harder for ethanol imports to enter the market. This can have serious adverse consequences. For example, restricting supplies will tend to increase the price of fuel – including both gasoline and ethanol -- in the .
The bill also provides for reducing the tariff further in the future if ethanol subsidies are reduced in the future. And it would require the Energy and Commerce Departments to report to Congress about how even deeper cuts in the tariff would affect fuel prices and domestic ethanol production.
“We need to do everything we can in Washington to alleviate the pain hard-working Coloradans are feeling with skyrocketing gas prices,” said Udall. “This bill makes common sense adjustments that can help peoples’ pocket books in the short-term and diversify our energy portfolio in the long-term.”
"This bill opens the door to lower fuel prices in the short term and promotes the growth of alternative sources of fuel for the long term," said Perlmutter. “Looking at ways to increase opportunities for alternatives to traditional petroleum-based fuel is good for our national security, good for the climate and good for jobs."
