Senate votes to cut ethanol tax credits

Washington Post:

The Senate on Thursday approved an amendment that would end tax credits for ethanol that refiners blend into motor fuel.

In a 73-to-27 vote, the Senate backed an amendment by Sen. Dianne Feinstein (D-Calif.) to the Public Works and Economic Development Act, though the House would still need to approve a comparable measure before it could be signed into law.

The Feinstein amendment would abruptly eliminate the tax credits, which cost the federal government about $6 billion a year, on July 1. The credits currently provide 46 cents a gallon to refiners. The amendment would also eliminate the 51-cent-a-gallon protective tariffs that discourage imports.

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It maybe a tougher vote in the House. They also need to remove the requirement that it be blended into gasoline. It is inefficient and expensive. It makes much more sense to develop domestic energy source line the Eagle Ford play in Texas. We also need to speed the adaptation of the gas to liquid technology so that we can convert our abundant supply of natural gas to motor fuel without having to make a big change to the infrastructure.