On July 21, Sen. Tom Harkin, D-Iowa, introduced a bill in the U.S. Senate to make changes in the federal tax code to encourage construction of an ethanol pipeline across America.
As Harkin told members of the Iowa Corn Growers Association who were in Washington D.C. and met with him, a provision in the tax code is effectively blocking publicly traded partnerships that build and operate most fuel pipelines. By law, publicly traded partnerships must earn 90% of their income from the exploration, transportation, storage or marketing of depletable natural resources - oil, gas and coal - but not renewable fuels. Harkin's bill would add renewable fuels approved by the federal EPA to this list.
Sen. Chuck Grassley, R-Iowa, told Harkin, "I will work in the Finance Committee to see that this proposal is included in the legislation. I think it is reasonable to treat all pipelines the same. Alternative energy such as ethanol and other biofuels should be in our future - we need all kinds of renewable energy."
Bill would help create ethanol pipeline
Harkin and Richard Lugar, a Republican from Indiana, introduced the legislation aimed at helping to efficiently bring ethanol to communities across America by giving pipeline owners the same tax benefits the companies received for moving petroleum products. While the Midwest and Plains states produce the most renewable fuels, the country is lacking the infrastructure to most efficiently transport these liquid fuels to population centers in the East and elsewhere.
While the most efficient mode of transporting liquid biofuels is by pipeline, a provision in the tax code is blocking a pipeline from being built, says Harkin.
"We must seize control of our energy future and shift rapidly to clean, home-grown sources of energy, including ethanol and other renewable fuels," he adds. "Our bill makes a simple change to the tax code that meets the demands and realities of the 21st century for the energy marketplace. It will help remove barriers so that biofuels produced in the Midwest and elsewhere have an efficient, inexpensive way to transport these renewable fuels to the market. And it will continue to provide relief to consumers getting hit hard with rising fuel costs."
Several efforts to boost ethanol pipeline
Lugar says, "We must explore every option for reducing our dependence on foreign oil. Over coming problems in moving ethanol through pipelines, as Brazil has done, is important in developing the full promise of America's renewable fuels. This legislation will help determine U.S. infrastructure planning and development."
Harkin and Lugar have partnered on several efforts to boost ethanol transport by pipeline. In March 2007 they introduced The Ethanol Infrastructure Expansion Act of 2007, directing the Department of Energy to conduct a feasibility study on transporting ethanol by pipeline. The measure was included in the energy bill that became law in December 2007. An expanded version of that measure was also included in the new federal farm bill, which became law on May 22, 2008.