Date: January 30, 2008

Author: Tom Doggett

Source: Reuters

Washington- Energy Secretary Sam Bodman hinted on Tuesday that the Bush administration's new government budget for the 2009 spending year may propose changing the U.S. tariff on ethanol imports.

Speaking at the U.S. Chamber of Commerce, Bodman said the White House's 2009 budget, which will be sent to Congress next Monday, "will start to deal with that question" of whether the 54-cent-a-gallon import tariff should be allowed to expire at the end of this year or whether it should be renewed.

Many energy experts have argued that the U.S. ethanol industry is mature and can compete with ethanol supplies from other countries, particularly shipments from Brazil, without the protection of a fee levied on imports.

Bodman would not confirm whether the Bush administration will ask Congress to begin phasing out the import tariff or the subsidy for domestic producers. But he suggested the U.S. ethanol industry could survive with less government help.

"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 said.

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

Talking with reporters later, Bodman would not clarify whether the administration will propose to reduce or eliminate the ethanol subsidies or the protective tariff.

"I'm not going to speak to that. We will announce the budget next week," he said. "The budget will speak for itself."