At a recent hearing on summer fuel prices, some U.S. Senators broached the question of easing tariffs on ethanol imports to help fill the potential gaps in domestic supplies. Imported ethanol currently is subject to two duties in the U.S. -- a 2.3 percent ad valorem tax and a secondary tariff of 54 cents per gallon. However, such legislative proposals are believed to face problems moving forward this election year due to the shorter calendar.
Agriculture and ethanol industry leaders maintain their will be enough of the renewable fuel. With 97 plants in operation and more than 100 million gallons of ethanol expected to be imported, they contend, there will be no shortage.
Anne Steckel, American Farm Bureau Federation: "We are increasing ethanol production facilities immensely. 33 new refineries are coming into play with nine in expansion. The future is very bright for ethanol, and our firms are doing all the right things."
Worries about Iran continue to lift oil prices. Traders are anxious that U.S. efforts to stop that country's suspected nuclear weapons program could lead to a disruption in Persian Gulf oil supplies. China also is a factor in the rising prices. As the world's fastest expanding economy continues to grow, Beijing's hunger for oil is affecting its position on Iran, and was high on the agenda for President Hu Jintao's visit to the White House this week.
President Bush has warned China against trying to "lock up" global supplies. In the interest of keeping their investment healthy with Iran, the Chinese have refused to support sanctions against the Middle Eastern country for defying the Security Council over its enrichment of uranium. In 2004, China used some 6.5 million barrels of oil a day and surpassed Japan as the world's second largest user of petroleum products. The U.S. is the largest user, consuming about 20 million barrels a day.