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Senate Panel's New Ethanol Mandate Threatens Highway Safety

7 September 2000

Senate Panel's Massive New Ethanol Mandate Threatens Highway Safety, Higher Gas Prices

    WASHINGTON, Sept. 7 A key congressional panel is expected
to vote today to create a massive new nationwide ethanol mandate, subsidized
by the fuel taxes motorists and truckers pay at the pump.  If enacted into
law, the new ethanol mandate will mean the loss of billions of dollars for
needed highway projects that would improve roadway safety and relieve
congestion over the next decade, according to the American Highway Users
Alliance.  The mandate could also make the gasoline price spikes, seen this
summer in Chicago, Milwaukee, and other parts of the Midwest, a nationwide
phenomenon.
    "Because ethanol isn't taxed like other motor fuels, ethanol users don't
pay their fair share for road and bridge improvements," said William D. Fay,
president and CEO of the Highway Users.  "By reducing the funding available
for highway improvements, this proposed legislation will inevitably result in
crashes, injuries, and fatalities that could have been prevented. I t will
also increase emissions from cars idling in gridlock."
    The legislation (S. 2962) expected to be approved today by the Senate
Environment and Public Works Committee would establish a massive nationwide
renewable fuels program, mandating a large new market for ethanol-blended
gasoline.  Under current law, ethanol receives a 54 cents-per-gallon tax
subsidy which will cost the federal Highway Trust Fund $837 million in lost
revenues this year.  The Senate bill's new legislative requirement to sell
even more ethanol would result in annual losses to the Highway Trust Fund
totaling $1.16 billion in 2007 and $1.58 billion in 2011.  Because federal law
now guarantees that all highway trust funds must be invested in safer, less
congested roads and other transportation improvements, increased subsidies for
ethanol mean a dollar-for-dollar loss in highway funding to the states.
    "Highways desperately need that funding," continued Fay.  He pointed to
U.S. Federal Highway Administration data rating more than 18 percent of all
roads eligible for federal assistance in either poor or mediocre condition and
judging 30 percent of all U.S. bridges over 20 feet in length to be deficient.
Safety experts estimate that poor road conditions and outmoded road designs
contribute to over 14,000 deaths annually.
    Fay also pointed to the likelihood of gasoline price hikes as refiners
meet the mandate by blending ethanol with gasoline.  That's because ethanol
cannot be delivered by the pipelines that transport other fuels, threatening
the ability of refiners to deliver ethanol-blended fuel efficiently to the
marketplace and potentially constraining fuel supplies.  Supply disruptions
caused gas prices to soar in the Midwest this summer.
    "This committee is the first battle in a long legislative war," said Fay.
"We'll be fighting to make sure this bill is not taken up by the full Senate
or slipped into an eleventh-hour, omnibus appropriations bill designed to pass
right before Congress adjourns for the year."