USDA Secretary Vilsack Supports Scaling Back Ethanol Subsidies

The secretary would like to redirect some of those funds to helping gasoline retailers offer more ethanol blends.

April 22, 2011

MINNEAPOLIS - U.S. Department of Agriculture Tom Vilsack backs reducing the federal ethanol subsidy but does not support eliminating it entirely, the Minneapolis Star Tribune reports. Vilsack would like to use some of those funds to assist gasoline stations in offering more ethanol blend options at the pump. He also wants to send part of those funds to research renewable energy.

During an interview with the newspaper??s staff, Vilsack said that Congress should not just take away the 45-cent-per-gallon federal ethanol credit. "When the biodiesel tax credit was allowed to expire, we lost 50 percent of production capacity immediately ?" 12,000 jobs were lost," said Vilsack.

He fears the same scenario could occur if the ethanol subsidy is allowed to expire at the end of 2011. "The one thing you don't want to do when the economy is fragile...is to take steps that actually discourage employment," said Vilsack.

Vilsack offered his support of measures from Growth Energy and Sen. Amy Klobuchar (D-MN) to lower and reallocate ethanol subsidies. The agriculture secretary would like such a plan to take place over four or five years.

In separate news, the USDA has started giving gasoline stations incentives to install ethanol blender pumps as part of an existing $70 million initiative. Vilsack said that with more money redirected from ethanol subsidies, the agency could promote and assist more gasoline retailers in offering ethanol blends.

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