National Taxpayers Union ethanol study is off the mark

National Taxpayers Union ethanol study is off the mark

A National Taxpayers Union (NTU) study released recently is misleading, and the American Coalition for Ethanol (ACE) cautions consumers not to take this information at face value.

"The only thing abundantly clear is that NTU's 'study' is nothing more than a deceptive piece of propaganda with no basis in reality," said Brian Jennings, ACE Executive Vice President. "The fact is that with modest support from the federal government, ethanol offers an excellent return on investment with a host of benefits to our nation's economy, environment, and energy security. These facts were somehow left out of the NTU report."

The study aims many of its arrows at the Blender's Tax Credit, the federal tax incentive on ethanol. NTU incorrectly states that this tax credit goes to ethanol producers, when in reality it is an incentive the petroleum industry receives for blending ethanol into their gasoline.

"The Blender's Tax Credit is one of the most cost-effective and consumer-friendly policies ever enacted by Congress, because it is typically passed on to motorists in the form of lower prices at the pump," Jennings added. "Removing this incentive, which is what NTU appears to be advocating, doesn't seem like good tax policy for working families who are already experiencing too much pain at the pump due to record-high oil prices."

Some facts about ethanol:

--Today the U.S. is home to more than 100 ethanol biorefineries, of which about half are owned by farmers and other local investors. The U.S. ethanol industry is very diverse, not owned or controlled by one single company.

--There are more than 30 ethanol plants under construction, putting the industry at a growth rate of more than two facilities a month. Contrast this to the oil industry which hasn't built a new gasoline refinery in 30 years.

--U.S. farmers benefit from ethanol production through increased demand, which leads to a stronger price for their crops--better market-based prices mean less need for government price supports.

--Ethanol is now blended into more than 40 percent of America's gasoline, displacing expensive oil and gasoline with a homegrown, clean-burning alternative.

"The NTU attacks American-made ethanol from all sides, but they do not point to any alternatives, nor do they point to the extravagant incentives that the petroleum industry has received for decades," Jennings said. "Ethanol is a clear, immediate way for the U.S. to begin weaning itself off of expensive foreign energy. If we can begin to move toward energy independence by using ethanol--a homegrown alternative that puts our citizens to work, adds value to American ag products, and cleans our environment--this is something NTU should advocate, not attack."

The American Coalition for Ethanol is a grassroots trade association for the U.S. ethanol industry with more than 1200 members nationwide. For more information, visit www.ethanol.org.

Date: 7/26/06

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