Proponents of ethanol will see a setback in their efforts to advance its use as a renewable fuel. The U.S. Senate voted yesterday to approve a measure repealing $5 billion in subsidies for ethanol producers and business owners who sell ethanol-enriched gasoline. The tax credit currently provides 45 cents per gallon to oil refiners who mix ethanol with gasoline. Opponents say increasing ethanol use has negative effects, such as driving food prices up, which for example makes it more expensive for farmers to feed livestock.
Ethanol supporters like Steve Klein of the County Line Mart in Keota say the decision does not bode well for ethanol development, and users could see a drastic increase in the price of E85 gasoline. The measure will now be added to a federal economic development program. The Senate voted 73-27 to repeal the subsidies.