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Ethanol group forsees short-term extension

An official of the Renewable Fuels Association says a one or two year extension of the ethanol tax credit may be the best the ethanol industry can hope for out of the lame-duck Congress.  And Matt Hartwig says, even if that happens, the incentive may be reduced from the current 45 cent per gallon credit.

RFA and other ethanol groups favor a long-term extension of the ethanol tax credit, which is called for in pending House and Senate bills.  But Hartwig says the political reality doesn’t favor that.  He says the pressure to modify the credit is coming largely from deficit hawks, many who still want the biofuels industry to grow, but in a fiscally responsible way.  Hartwig says a short-term extension still allows time to have the larger debate over how to restructure energy policy.