Date: February 2008

Author: Kris Bevill

Source: Ethanol Producer Magazine

U.S. Sen. Chuck Schumer, D-N.Y., has announced plans to reintroduce legislation to lift the ethanol import tariff when Congress reconvenes next week. The announcement came after a report released by his office stated that the price of milk throughout New York City had risen substantially. According to Schumer, the rise in dairy prices has been caused, in part, by increased demand for corn-based ethanol, and a reduction of pressure on the corn market will positively affect milk prices.

The legislation would immediately lift the tariff and would oppose any extension of the tariff past the end of this year. Schumer plans to introduce the bill as a stand-alone measure but wouldn’t rule out the possibility of attaching it as an amendment to another measure already moving through the process.

The Renewable Fuels Association disagreed with Schumer's stance, however. “Senator Schumer is wrong in assuming that it is ethanol of any kind that is driving up the price of milk," said Matt Hartwig, RFA communications director. "It is a complex issue, and Schumer’s plan would not have any impact on the cost of milk."

Larry Simpson, director of the Renewable Energy Network of Entrepreneurs in Western New York , said that lifting the tariff would certainly put downward price pressure on the ethanol industry. Producers are already dealing with rising feedstock prices, and doing away with the tariff would affect the industry only in a negative way, he said, especially for those ethanol plants in New York that are just getting started.