ETHANOL

[timhyma]

Midwest senators renew ethanol pipeline efforts

7/21/2008, 2:45 PM CDT




U.S. Senators Tom Harkin (D-IA) and Richard Lugar (R-IN) on Monday introduced legislation aimed at helping to efficiently bring ethanol to communities across America by giving pipeline owners the same tax benefits they receive for moving petroleum products.

While the Midwest and Plain states produce the most renewable fuels, the country is lacking the infrastructure to most efficiently transport these liquid fuels to population centers in the East and elsewhere.

While the most efficient mode for transporting liquid biofuels is by pipeline, a provision in the tax code is effectively blocking Publicly Traded Partnerships (PTP) -- that build and operate most liquid pipelines -- from moving forward. By law, PTPs are supposed to earn 90% of their income from the exploration, transportation, storage, or marketing of depletable natural resources, including oil, gas, and coal, but not renewable fuels.



The Harkin-Lugar bill would change the tax code to state that PTPs can earn "qualified" income from the transport, storage, or marketing of any renewable liquid fuel approved by the Environmental Protection Agency.

"We must seize control of our energy future and shift rapidly and robustly to clean, home-grown sources of energy, including ethanol and other renewable fuels. Our bill makes a simple change to the tax code that meets the demands and realities of the 21st century energy marketplace, removing barriers so that biofuels producers in the Midwest and elsewhere will have an efficient, inexpensive way to transport these renewable fuels to the market. And it will continue to provide relief to consumers getting hit hard with rising fuel costs." Harkin said.

"We must explore every option for reducing our dependence on foreign oil. Overcoming problems in moving ethanol through pipelines, as Brazil has done, is important in developing the full promise of America's renewable fuels. This legislation will help determine U.S. infrastructure planning and development, Lugar added.

Harkin and Lugar have partnered together on several efforts to boost ethanol transport by pipeline. In March 2007, the two introduced The Ethanol Infrastructure Expansion Act of 2007, directing the Department of Energy to conduct a feasibility study on transporting ethanol by pipeline. The measure was included in the energy bill that became law on December 19, 2007. An expanded version of that measure was also included in the new farm bill passed in May.