[Congressional Record Volume 152, Number 54 (Monday, May 8, 2006)]
[Senate]
[Page S4158]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. FEINSTEIN (for herself, Mr. Kyl, and Mr. Sununu):
  S. 2760. A bill to suspend the duty on imports of ethanol, and for 
other purposes; to the Committee on Finance.
  Mrs. FEINSTEIN. Mr. President, I rise today with Senators Kyl and 
Sununu to introduce a bill to strike the ethanol import tariff.
  With record high gas prices and demand for ethanol growing faster 
than expected, I believe we need to act now to ease the ethanol supply 
crunch.
  As many of my colleagues know, I have been strongly opposed to the 
ethanol mandate that was included in the energy bill enacted last 
August.
  Today, more than ever, I believe that the time has come to end 
unwarranted subsidies to ethanol producers.
  They include: $4.5 billion in agricultural subsidies in 2004 alone 
that benefit corn farmers (Environmental Working Group); a 51 cent per 
gallon tax credit for ethanol producers; and a 7.5 billion gallon 
ethanol mandate that was included in the energy bill.
  The current 51 cent per gallon subsidy is costing American taxpayers 
$2 billion per year, and will cost even more after 2012--almost $4 
billion per year--when the use of ethanol is mandated to nearly double.
  Now that the ethanol mandate is law, it is time for the subsidies to 
cease.
  I believe we need to start by striking the 54 cent per gallon ethanol 
import tariff.
  Ethanol imports are extremely limited, even though production costs 
for ethanol in foreign countries are significantly lower than in the 
United States.
  For example, according to the Congressional Research Service, 
Brazilian productions costs are 40 to 50 percent lower than in the 
United States. Yet the tariff raises the cost of ethanol enough to pose 
a significant barrier to imports.
  It is egregious to put such a high tariff on ethanol importation. It 
makes it impossible for U.S. consumers to purchase the lowest-cost 
ethanol.
  And with the refineries choosing to phase-out MTBE this year, the 
demand for ethanol is even greater than was expected.
  It is not clear if the domestic supply will be able to meet that 
growing demand.
  Any ethanol supply disruption will hurt drivers on the east and west 
coasts the most.
  Right now, ethanol is produced in the Midwest and must be trucked or 
railed to the coasts. According to news reports, ethanol delivery from 
the Midwest is currently being hindered by strong demand for limited 
rail time and a shortage of trucks and drivers.
  If we strike the tariff, refineries can have more economic and 
efficient access to ethanol.
  So, it's time to eliminate this 54 cent tariff and give consumers a 
break at the pump.
  And we are not alone in this effort. Just last week, the President 
asked that Congress consider eliminating the tariff.
  If they are going to be forced to use ethanol, our refineries should 
have the ability to buy it from the cheapest seller. They should not be 
constrained by artificial protectionist tariffs.
  I hope my colleagues will join with me to strike this tariff.
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