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Ethanol tariff will survive, senator says

Agriculture.com Staff 05/10/2006 @ 10:22am

President George W. Bush's proposal to drop a tariff on imported ethanol isn't likely to get through Congress, Senator Tim Johnson (D-SD) told Agriculture Online Wednesday.

Legislation has already been introduced in both the House and Senate to repeal or suspend the 54-cent a gallon tariff on imported ethanol. And last week President Bush told CNBC that he favors dropping the tariff.

"I think it makes sense ... when there's a time of shortage of a product that's needed, so consumers have a reasonable price, it seems to me to make sense to address those shortages," Bush said. "And dropping a tariff will enable the foreign export of ethanol (to get) into our markets, which will particularly help on our coasts."

Johnson said Wednesday that there's too much opposition for that to happen.

"I think we're going to be able to beat this back. We have bipartisan support on the Senate side for maintaining the tariff," he said.

Shortages of ethanol are being blamed for higher gasoline prices on the East Coast, where blenders are shifting from MTBE to ethanol. But Johnson said the nation has adequate ethanol supplies and that, if anything, they're helping to lower gasoline prices. Dropping the tariff would hurt a U.S. ethanol industry that is expanding rapidly, he said.

Any Senate legislation to drop the tariff would have to go through the Senate Finance Committee, Johnson said. That committee's chairman is Senator Chuck Grassley (R-IA), another strong supporter of ethanol.

President George W. Bush's proposal to drop a tariff on imported ethanol isn't likely to get through Congress, Senator Tim Johnson (D-SD) told Agriculture Online Wednesday.

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