July 22, 2008

Ethanol pipelines back on radar screen

Share:
Senators Tom Harkin (D-IA) and Richard Lugar (R-IN) have introduced legislation that would give ethanol pipeline owners the same tax benefits they receive for moving moving petroleum products.

According to this article, a provision in the tax code blocks Publicly Traded Partnerships (PTP) – which build and operate most liquid pipelines – from moving forward with plans for biofuels. By law, PTPs are supposed to earn 90 percent of their income from the exploration, transportation, storage or marketing of depletable natural resources, including oil, gas and coal -- but not renewable fuels.

The Harkin-Lugar bill would change the tax code to state that PTPs can earn “qualified” income from the transport, storage or marketing of any renewable liquid fuel approved by the Environmental Protection Agency.

While most of the country's renewable fuels are produced in the Midwest, the only option to transport such fuels to the coasts is via rail or truck. Pipelines could be another option.

There has been talk of an ethanol pipeline in Nebraska that would move ethanol to a regional terminal, and another that would move ethanol from Iowa to the Northeast. If this legislation would help them along, that may be a good thing.

No comments:

Post a Comment