Economic Development Revitalization Act of 2011

Floor Speech

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Ms. COLLINS. Mr. President, I am pleased to join Senators Feinstein and Coburn supporting an amendment to repeal the ethanol excise tax credit and the ethanol import tariff. These policies are fiscally irresponsible, environmentally unwise, and economically indefensible. Today we have another opportunity to take action to end them.

Historically, our government has helped a product compete in one of three ways: we subsidize it, we protect it from competition, or we require its use. Right now, ethanol may be the only product receiving all three forms of support.

The ethanol tax break is extraordinarily expensive. The Government Accountability Office has found that the tax credit costs American taxpayers a staggering $6 billion annually. This is quite a sum to prop up a fuel that is causing land conversion for corn production, commodity and food prices to rise, and is barely putting a dent in our Nation's dependence on foreign oil. With our amendment, we have the opportunity to immediately save American taxpayers nearly $3 billion for the remainder of 2011 alone.

Ethanol use is mandated under the renewable fuels standard, RFS, which guarantees market for corn ethanol. Collectively, the first generation biofuels industry will receive tens of billions in unnecessary subsidies through the year 2022. If the current subsidy were allowed to continue for five years, the Federal Treasury would pay oil companies at least $31 billion to use 69 billion gallons of corn based ethanol that the RFS already requires them to use. We simply cannot afford to pay the oil industry for following the law.

The data overwhelmingly demonstrate that the costs of the current ethanol subsidies and tariffs far outweigh their benefits. Just last summer, the Center for Agricultural and Rural Development at Iowa State University estimated that a 1-year extension of the ethanol subsidy and tariff would lead to only 427 additional direct domestic jobs at a cost of almost $6 billion, or roughly $14 million of taxpayer money per job.

While expanding our capacity to generate alternative, domestic fuel sources is an important step toward becoming less dependent on foreign oil, I have serious concerns about the effects of increased ethanol use. There are other alternative sources of energy that make far more sense.

The energy, agricultural, and automotive sectors are already struggling to adapt to the existing ethanol mandates. I have concerns with the partial waiver issued by the Environmental Protection Agency for the use of E15, a blend of gasoline containing 15 percent ethanol. Many residents in my state have already experienced difficulties using gasoline blended with just 10 percent ethanol, finding that it causes problems in older cars, snowmobiles, boats, and lawn mowers. The EPA's E15 waiver fails to adequately protect against misfueling and will add unnecessary confusion at the gas pump for consumers. We simply cannot place so many engines in jeopardy.

These first generation biofuel mandates also present environmental concerns as they could result in energy efficiency losses and increased air pollution because the mechanical failures can jeopardize the effectiveness of engine emission controls.

Over recent years, we have also seen food and feed prices increase as crops have been diverted for the production of corn-based ethanol. We should be raising food crops for food, not for fuel. Senate Homeland Security Committee chairman Joe Lieberman and I held a series of hearings in 2008 to examine the impact of corn based ethanol on food prices and we found that it certainly had a negative impact.

The cost of this policy to our Nation and its taxpayers, particularly given our current fiscal crisis, can no longer be ignored. At a time when we are projecting a deficit this year alone of $1.5 trillion, how can we justify spending $6 billion to subsidize ethanol?

I urge my colleagues, especially those who questioned the process used to bring an identical amendment to the floor just a couple days ago, to join me today in supporting the Feinstein-Coburn amendment to repeal these fiscally indefensible corn-based ethanol subsidies.

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