U.S. Sens Tom Harkin of Iowa and Richard Lugar of Indiana, have presented legislation to help bring ethanol to communities across America. This bill would give pipeline owners the tax benefits equal to those designed for moving petroleum products.
Part of the challenges with ethanol as fuel is the fact that Midwest and Plain states produce the product, but the nation doesn't have the infrastructure to efficiently move the liquid fuels to the population centers.
A provision in the tax code is blocking Publicly Traded Partnerships — that build and operate most liquid pipelines — from moving forward on the biofuels front. By law, PTPs must earn 90 percent of their income from the exploration, transportation, storage or marketing depletable natural resources, including oil, gas and coal, but not renewable fuels, reports USAgNet.
The Harkin-Lugar bill would change the tax code so that PTPs can earn "qualified" income by transporting, storing or marketing any Environmental Protection Agency-approved renewable fuel.
"Our bill makes a simple change to the tax code that meets the demands and realities of the 21st century energy marketplace, removing barriers so that biofuels producers in the Midwest and elsewhere will have an efficient, inexpensive way to transport these renewable fuels to the market," said Harkin.
"Overcoming problems in moving ethanol through pipelines, as Brazil has done, is important in developing the full promise of America's renewable fuels," said Lugar. "This legislation will help determine U.S. infrastructure planning and development."
This is not the first time that Harkin and Lugar have partnered together on ethanol transport issues. In March 2007, they presented 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. The 2008 Farm Bill contains an expanded version of that measure.