US senator opposes changing ethanol import tariff

By Tom Doggett

WASHINGTON, Jan 30 (Reuters) - Chuck Grassley, the top Republican on the Senate Finance Committee, said on Wednesday he was against a possible move by the Bush administration to reduce the U.S. tariff on ethanol imports.

Grassley was responding to comments by U.S. Energy Secretary Sam Bodman on Tuesday that hinted the White House's new government budget for the 2009 spending year may propose scaling back or eliminating the ethanol tariff.

The tariff on ethanol imports is set to expire at the end of this year but could be renewed. U.S. ethanol blenders also get a separate 51-cent-a-gallon tax credit through 2010.

"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 told the U.S. Chamber of Commerce.

Bodman said the 2009 budget, which the White House will send to Congress next Monday, "will start to deal with that question" of whether the import tariff should be allowed to expire at the end of this year or if it should be renewed.

Grassley, who represents Iowa, where farmers grow a lot of corn that is distilled into ethanol, wants the tariff to stay.

"By lifting the ethanol tariff, we'd end up subsidizing Brazilian ethanol. I can't figure out why Secretary Bodman would want the United States to risk becoming dependent on Brazilian ethanol when we're already dependent on Middle East oil," Grassley said in a statement.

"His comments really do a disservice to President Bush who has been the most pro-ethanol president we've ever had," said Grassley.