Sens. Charles Grassley (R-Iowa) and Kent Conrad (D-N.D.) have introduced The Grow Renewable Energy from Ethanol Naturally—or GREEN-- Jobs Act of 2010.  Additional co-sponsors on the bill include Sens. John Thune (R-S.D.), Ben Nelson (D-Neb.), Mike Johanns (R-Neb.) and Tim Johnson (D-S.D.).  This legislation mirrors H.R. 4640, the Renewable Fuels Reinvestment Act, introduced by Reps. Earl Pomeroy (D-N.D.) and John Shimkus (R-Ill.) in March.

The Senate legislation would extend the 45 cents-per-gallon ethanol blenders' tax credit and the 54 cents-per-gallon ethanol import tariff for five years, through the end of 2015. Both provisions are slated to expire at the end of this year. The bill also would extend the $1.01 per gallon cellulosic ethanol production tax credit until the end of 2015.

The National Corn Growers Association was among the agriculture groups quick to comment on the bill. “NCGA appreciates the dedication Senators Grassley and Conrad have to the renewable fuels industry and their continued commitment to American agriculture,” said Darrin Ihnen, NCGA president and grower from Hurley, S.D. “We are pleased to see that both the House and Senate understand how important the tax credit is to our industry.  We look forward to working with them to pass this legislation.”

According to recent reports by the Renewable Fuels Association and Growth Energy, if the ethanol blenders’ credit is not extended, thousands of jobs directly involved with the ethanol industry – a majority of them in rural America – would be lost due to reduced ethanol demand.  The studies show domestic ethanol production would decrease by roughly 4 billion gallons, which is equivalent to closing two out of every five ethanol plants operating today.  The demand decline also would potentially lower corn prices by roughly 8 percent, $0.30 per bushel.

In 2009, the ethanol industry returned $3.4 billion to the Federal Treasury than the cost of the ethanol blenders’ tax credit.  This figure also does not take into account additional positive returns in the form of increased state and local taxes, increases in household income and savings resulting from decreased oil imports, NCGA contends.

Removing the secondary tariff on foreign-produced ethanol would result in increased dependence on imported fuels. Similarly, if the secondary tariff is not extended, 28 states would see drastic economic loss, including Iowa, Illinois, Nebraska, Minnesota, Indiana and South Dakota.

The American Farm Bureau Federation also supports the extension and expansion of existing renewable energy tax incentives and supports new incentives to expand the production of cellulosic fuels, cellulosic generated power and the production of biogas. New and expanded incentives that encourage a more diverse feedstock base for cellulosic fuels are needed to reduce price competition for crops that can serve as energy sources and as food and feed.

 “American farmers and ranchers are playing a bigger role in supplying our nation with the energy it needs through the production of agricultural-based, renewable energy resources,” says Bob Stallman, AFBF president.  “The successful development of our nation’s ethanol industry stands as a testament to the effectiveness of tax incentives for renewable energy.”

The industry, which was launched with the aid of tax incentives during the 1980s, now has the capacity to produce more than 10 billion gallons of fuel. Tax incentives also have proven valuable in promoting the production of biodiesel made from oilseed crops and animal fats.

Unfortunately, says AFBF, existing renewable energy tax incentives are temporary with varying expiration dates. Long-term extensions are needed to boost renewable technologies and support development of the market infrastructure necessary to make these technologies more competitive. In addition, the long-term extension of renewable energy credits will ensure industry stability and attract the capital necessary to realize the benefits of long-term planning.

 S. 3231 is companion bill to H.R. 4940, the Renewable Fuels Reinvestment Act, introduced earlier this year by Reps. Earl Pomeroy (D-N.D.) and John Shimkus (R-Ill.).