House Majority Leader John Boehner (Bay-ner) said Tuesday it's possible the House will back the President's proposal. The Ohio Republican claims imported ethanol could help establish a U.S. market for the fuel additive, helping build demand while U.S. manufacturers build new ethanol refineries.
Meanwhile, farm state lawmakers say ending an ethanol tariff would hurt U.S. agriculture. Senator Charles Grassley claims ending the import tax on the fuel additive only will help major oil companies. In a recent statement, the Iowa Republican said, "Everyone's looking for a way to lower gas prices, but lifting the ethanol tariff won't mean lower prices for consumers. What's more, it would undermine efforts to make our country more energy independent and reward the oil companies that already are raking in record prices."
Grassley, who is a farmer himself, added the only other major ethanol producer is Brazil, where supplies already are tight. According to energy officials, the country's export volume is expected to remain flat despite large local and international demand.
For his part, Senator Tom Harkin announced on Thursday a renewable fuels program that would increase the nation's use of ethanol to 60 billion gallons a year by 2030. Use of the fuel additive is currently 4.5 billion gallons annually. The Iowa Democrat said, "We must do much more to increase our use of homegrown ethanol and biodiesel. This proposal lays the roadmap to a long-term ramp-up in domestically produced renewable fuels."
Oil companies continue to blame recent increases in gasoline prices on refiners shifting from MTBE as a gas additive to ethanol. The domestic ethanol industry disagrees, saying there will be plenty of product available. The Renewable Fuels Association claims that removing the tariff on imported ethanol isn't the answer to the country's current high gas prices. Some energy experts go as far as saying the ethanol concerns are temporary and that the problems have less to do with shortage of the additive than other factors.