Opinion

Removing the ethanol labeling requirement

Monday, March 21, 2011

As we look forward to warmer weather, one thing I know we are not looking forward to is a rise in gas prices.

That's why it is hard to believe that President Obama has inserted in his 2011 budget proposal a tax increase on domestic oil and gas companies that would push gas prices even higher.

The President's budget calls for repealing the Section 1099 tax credit which would equal a double taxing of American oil and gas companies who also have production facilities in other countries. This double taxation will affect businesses right here in Nebraska -- businesses that have said the extra taxes will make it more difficult for them to invest in our state.

If Congress passes this provision in the final budget it may lead to lost jobs and lost investment in Nebraska. I am sure that you will agree with me that our elected officials in Washington need to be pushing legislation that creates jobs, but this proposal by the President does just the opposite.

As we look closer to home in the Nebraska Legislature, a bill I introduced for the Association of Nebraska Ethanol Producers and supported by the Nebraska Grain and Feed Association, LB 698, will be debated this week. It advanced to General File out of the Agricultural Committee with a 6-2 vote.

The purpose of LB698 is to address coming federal changes in the ethanol industry by the repealing of the Nebraska law governing the labeling of motor fuels dispensers containing oxygenates (alcohol-blended fuels), which was enacted more than two decades ago. By so doing, the bill removes an unnecessary obstacle to further expansion of a growing industry in Nebraska and the difficulty of labeling "blender pumps," a new type of dispenser that lets you choose the amount of ethanol in your fuel.

The bill came out of committee with an amendment that I support. With the adoption of the committee amendment, the bill would no longer eliminate all labeling requirements, but raises the percentage of oxygenate required in the fuel before a label is required.

Currently, state law requires the labeling of any fuel being dispensed that contains 1% or more of alcohol. The committee amendment AM650 would raise the percentage to 11% or more to address the new changes from the Environmental Protection Agency (EPA).

Right now there is no federal requirement that gasoline containing 10% of ethanol or less be labeled. Recently, the EPA has ruled that gasoline containing a 10% blend of ethanol is essentially gasoline. Several states have increased their ethanol usage by removing labeling requirements all together.

Gasoline containing a 10 percent blend of ethanol has been marketed successfully in Nebraska for more than 30 years, but change is coming at the federal level. The Environmental Protection Agency has recently approved a blend of 15 percent ethanol and gasoline. At this time, the EPA has not developed labeling guidelines for E-15, but we expect that those guidelines will be coming soon.

I believe this is a great opportunity to help strengthen the industry here in Nebraska. Here are just a few things to consider.

Where would the Nebraska's state budget be without the Nebraska ethanol industry and usage of corn? The price of corn would be down, state revenue would be down, and more cuts would be necessary.

I believe we can open up further opportunity for growth in our home grown product. With more potential ethanol usage, Nebraska stands to increase corn and ethanol production, and increase cattle feed by-product for potential increase in cattle production, all bringing economic growth and revenue to the State.

Currently, Nebraska is the number two producer in America, why not be the leader.

I do want to be clear, LB 698 will still allow retailers to label their pumps as containing 10 percent ethanol if they so choose. This bill just removes the requirement to label 10 percent or less.

If you have comments, concerns, or questions about this bill or any other issue, please, call my office at 402-471-2805 or for more information you can view my legislative website at http://news.legislature.ne.gov/dist44/.

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