Bush budget doesn't alter ethanol import tariff

By Tom Doggett

WASHINGTON (Reuters) - The Bush administration did not propose any changes to the expiring U.S. ethanol import tariff in its new 2009 government budget that was sent to Congress on Monday, an Energy Department spokeswoman said.

The spokesperson said while the 54-cent-a-gallon tariff is set to expire at the end of December during the 2009 budget year, which begins this October 1, the administration will have discussions with lawmakers later this year on what should be done with the tariff.

The tariff is designed to protect U.S. corn-based ethanol makers from cheaper imports, mainly from Brazil which makes its ethanol from sugar.

Energy Secretary Sam Bodman had hinted last week while speaking at the U.S. Chamber of Commerce that he favored eliminating or cutting back the tariff and that the administration would address the issue in its new 2009 budget.

"I would just say I think that there are advantages to having had the kind of both subsidies and tariffs that have helped protect this industry. I believe that, the best I can tell, this industry is pretty close to being able to stand on its own," Bodman said at the time.

U.S. ethanol blenders get a separate 51-cent-a-gallon tax credit that runs through 2010.

"I think it's very important that we pursue a policy which gives the U.S. industry appropriate time and protection to develop," Deputy Energy Secretary Clay Sell told reporters at a briefing on the Energy Department's new budget.

"We'll look forward to having those discussions with the Congress, as we always do, as the appropriate policy when the tariff expires," he said.