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Senate Backs US Ethanol Boost in Energy Bill

17.06.2005
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Senate Backs US Ethanol Boost in Energy Bill
WASHINGTON - The US Senate on Wednesday overwhelmingly backed a plan to require oil refiners to double the use of corn-blended ethanol in gasoline by 2012, rejecting a move to gut the mandate from pending energy legislation.

Midwest lawmakers with corn-growing farm constituents have pushed hard for more incentives to produce ethanol, which can be used as an additive to make gasoline burn more cleanly or as an outright fuel in specially modified engines.

Senators from California and New York criticized the plan to require 8 billion gallons of ethanol a year by 2012, saying it was a boon to farm states that will boost gasoline prices.

The Senate voted 69-28 to put aside an attempt by Democratic Sen. Charles Schumer of New York to strip the ethanol incentives from the bill.

Instead, lawmakers voted 70-26 for a pro-ethanol amendment sponsored by a bevy of mostly farm-state senators from both parties that codified the mandate.

"Increased use of ethanol will do much to boost a struggling US agricultural economy," said Sen. Ben Nelson of Nebraska, a Democrat. Other sponsors of the amendment included Senate Majority Leader Bill Frist, Republican of Tennessee.

Schumer cast the ethanol plan as a tax that would boost fuel prices and benefit agribusinesses like Archer Daniels Midland Co., which has about 30 percent of ethanol market. An ADM spokesman was not available for comment.

"There is no sound public policy reason for mandating the use of ethanol, other than the political might of the ethanol lobby," Schumer said.

The Senate will debate the energy bill through next week, with a vote tentatively set for that Friday, Frist said.

The total cost of the ethanol measure is about $3.79 billion, according to Taxpayers for Common Sense.

About $650 million is earmarked to help ethanol plants use other plant materials like forest waste and plant fibers. It also includes $1 billion over four years to help oil refiners retool to make additives other than methyl tertiary butyl ether (MTBE) -- a water polluting fuel additive that the bill would ban four years after it is enacted.

The Senate bill also would protect ethanol makers from some liability lawsuits, similar to the shield which the House energy bill extended to competing MTBE producers.

California lawmakers secured an agreement that gives the state an exemption.

MTBE liability protection is not included in the Senate bill and will likely be settled in a House-Senate bargaining session. The White House may have to broker a compromise, analysts have said.

The Bush administration has thrown its weight behind ethanol, a politically popular additive.

"We're pretty good about growing corn here in America," President George. W. Bush said. "Therefore it makes sense to promote ethanol as an alternative to foreign sources of oil."

Bush again urged Congress to send him a final energy bill before adjourning for a summer recess around Aug. 1. "Summer is here, temperatures are rising, and tempers will really rise if Congress doesn't pass an energy bill," Bush said in a speech.

On Thursday, the Senate is expected to vote on a Democratic amendment that would cut US oil import dependence by 40 percent by 2025. Sponsor Maria Cantwell of Washington state likened the lofty goal to the Kennedy administration's plan to develop technology to send a man to the moon in less than a decade.

Republicans said Cantwell is stretching the bounds of ingenuity. "Going to Mars would have sounded pretty good in 1960 but we never would have gotten there," said Sen. Lamar Alexander of Tennessee.

Another Democratic amendment would require US utilities to get 10 percent of their electricity from renewable sources by 2020.


REUTERS NEWS SERVICE
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