| NEW YORK, June 6
NEW YORK, June 6 A new Senate bill to cut the
U.S. tariff on ethanol imports has little chance of clearing
Congress as there is not much time left on the legislative clock
and it is too hot a political issue to take up in an election
year, congressional aides say.
Senators Dianne Feinstein, a California Democrat, and Judd
Gregg, a New Hampshire Republican, introduced legislation this
week to lower the tariff to bring it in line with U.S. ethanol
blending subsidies, which a recently enacted farm bill lowered
to 45 cents per gallon from 51 cents per gallon.
The bill would cut import tariffs to 45 cents per gallon
from the current level of 54 cents per gallon, and require
Congress to lower tariffs again if blending subsidies are cut
The bill has been referred to the Senate Finance Committee,
where it is likely to sit.
The panel's chairman, Democrat Max Baucus, has previously
said he is against cutting the ethanol import tariff. In
addition, Baucus would not normally put a priority on
legislation sponsored by lawmakers who are not members of his
finance committee, as is the case with Feinstein and Gregg.
The top Republican on the finance committee, Chuck Grassley,
opposes the bill, an aide to the senator said.
Grassley said earlier this week that Brazil and other
countries can export more than 452 million gallons of ethanol
duty-free to the United States this year under a special trade
agreement with Caribbean nations, but that threshold has yet to
"Until Brazil and other countries take full advantage of
their existing ability to ship ethanol duty-free to the U.S.
market, we shouldn't even discuss providing them with yet more
duty-free access," Grassley said.
Many energy experts say the import tariff should be reduced,
or ended altogether, because the United States will need more
foreign supplies to meet a federal law requiring higher ethanol
use every year.
U.S. refiners have to blend 9 billion gallons of ethanol
with gasoline this year. Those volumes will slowly increase to
36 billion gallons by 2022.
The biggest obstacle to cutting the import tariff is the
strong opposition from farm state lawmakers. Most U.S. ethanol
is made from corn. Trying to deal with an issue that is not seen
as a vote-getter in an election year is deemed politically
"I'd be surprised," responded one congressional aide when
asked if the bill will move forward.
In addition, Congress is already working on a tight schedule
and there is not much time to debate controversial issues like
cutting the import tariff.
"There are so many other things that have to get done," an
(Reporting by Tom Doggett, editing by Matthew Lewis)