Bayh Promoting Ethanol Tax Credit

Will encourage stations to install, convert pumps to E85, he says

WASHINGTON -- U.S. Senator Evan Bayh (D-Ind.) has co-sponsored a bipartisan amendment to the Highway bill to help reduce American dependence on foreign oil by providing a tax credit to encourage gasoline stations to install or convert pumps that offer E85 ethanol.

Millions of flexible fuel vehicles (FFV) across the country run on E85 ethanol, a blend of 85% ethanol and 15% gasoline.

Recent high gas prices are just one example of the danger of relying on places like Saudi Arabia, Venezuela and Russia for our energy needs, Bayh [image-nocss] said. Ethanol is good for the environment, good for the economy, and good for our national security. We need to make the most of every opportunity to substitute ethanol and other energy sources for oil in order to decrease our dependence on foreign oil.

The amendment would provide a tax incentive of 50%, up to $30,000, for gas stations to use toward creating or expanding E85 pumps. By increasing the number of E85 pumps, the amendment will help decrease regular gasoline consumption and encourage more drivers to make the switch to FFV, further reducing the nation's dependence on foreign oil.

There are more than five million vehicles currently in the United States that can use E85 fuel, though a shortage of E85 pumps causes many drivers to use regular gasoline instead, Bayh said. If every FFV today was able to run exclusively on E85 fuel, they would cut U.S. gas consumption by more than four billion gallons each year, he claimed.

Ethanol is a plant-based fuel additive that can be used with or in place of regular gasoline to reduce carbon monoxide emissions, which pose health threats and environmental concerns. The proposed legislation will not only reduce dependence on foreign oil, but also increase demand for corn and soy products, he said.

Bayh is a co-sponsor of the Fuel Security Act, which dramatically increases the amount of ethanol used each year in an aggressive approach to move the country toward greater energy efficiency. Bayh also has voted to support the renewable fuels standard several times in the Senate and has written many letters to the Energy Conference Committee in support of a renewable fuels standard.

Some critics of increased ethanol use say that cars using it will get poorer mileage, which they consider to be a hidden tax or increased cost for the consumer. They also contend that reduced automobile emissions could be canceled out by increased emissions from more farm tractors, trucks hauling the corn, trucks hauling the ethanol to the bulk plants and ethanol plant emissions.