U.S. lawmakers target ethanol subsidies

WASHINGTON, May 4 (UPI) -- A bill introduced by a bipartisan panel of U.S. lawmakers aims to get rid of tax credits for companies blending ethanol into gasoline, backers of the bill said.

U.S. Sens. Dianne Feinstein, D-Calif., and Tom Coburn, R-Okla., aim to eliminate the 45 cent per gallon tax credit for refiners to blend ethanol into gasoline.

Feinstein in a statement said ethanol is the only part of the energy sector protected by what she said was a "triple crown" of government regulation -- its use is required by law, protected by tariffs and the U.S. government pays companies to use the fuel product.

The senators said the bill would eliminate about $6 billion in spending per year.

Coburn described the protection as "bad economic policy, bad energy policy and bad environmental policy" at a time when U.S. consumers are paying record-high prices for gasoline.

Industry backers said the tax credits encourage domestic energy production.

"The ethanol tariff makes our nation more dependent on foreign oil by increasing the price of imported ethanol," countered Feinstein.