Deficit Hawks Threaten Ethanol's Future

Jim Sensenbrenner pays extra to cruise his pontoon boat across Pine Lake in southern Wisconsin. He's willing to hand over 30¢ more per gallon for gasoline free of ethanol, which he calls "a lousy fuel" that corrodes his two-stroke outboard engine. One boater's opinion might not matter, except that Sensenbrenner happens to be the top Republican on the House Select Committee on Energy Independence and Global Warming. His ethanol aversion is a sign that the darling of alternative fuels is hitting a political wall. "People are worried about deficits, debt, and special-interest handouts," Sensenbrenner says. "Ethanol is all three." That sentiment is endangering the $27 billion industry that has grown up since federal support began under President Jimmy Carter amid the 1970s energy crisis. Today the U.S. offers a 45¢ per gallon tax credit to refiners that blend ethanol with gasoline. The government also requires gasoline makers to use a steadily increasing amount of the additive, and it imposes an import tariff to deter foreign competition...more