Legislation to open up domestic natural gas and oil production, extend ethanol tax incentives and grant Permanent Normal Trade Relations (PNTR) with Vietnam highlight the National Corn Growers Association (NCGA) end of year legislative victories.
“Congress ended with a bang and corn growers are very happy with the legislative victories securing more domestic development of natural gas, continuing our positive push for better trade and extending significant tax incentives for the ever-growing ethanol industry,” says Ken McCauley, NCGA president. “This legislation addresses some very important needs for corn farmers.”
Over the weekend, Congress approved the offshore continental shelf (OCS) oil and gas development legislation as part of a broad tax package. The approval opens up 8.3 million acres of domestic natural gas and oil production in the Gulf of Mexico. The House approved the measures Dec. 8. The Senate passed the legislation early on Dec. 9.
The OCS legislation is a step in the right direction for providing more natural gas supplies to the ever-increasing demand of energy, according to McCauley.
“The increased domestic supplies of natural gas will help corn producers with the price of the needed inputs such as fertilizer and irrigation costs – all items that are putting a serious strain on growers operations,” he says.
Congress also agreed to extend several energy tax incentives, including extension of the secondary tariff on ethanol through Jan. 1, 2009; a provision allowing for 50% accelerated depreciation in the year a new cellulosic biomass ethanol facility is put into service; and, an extension of a reduced excise tax rate on methanol or ethanol fuel derived from coal. Also included in the broad package is the granting of PNTR for Vietnam.
“The ethanol tariff extension legislation which includes a boost for cellulosic ethanol will ensure our tax money does not grow another country’s ethanol industry and our trading relationship with Vietnam will be strengthened,” McCauley concludes.
The next step is for President George Bush to sign the measures. Bush has indicated he will.