Since the creation of the domestic market for corn-based ethanol as an additive for gasoline, the federal government has nurtured and maintained the ethanol industry with a steady stream of subsidies. Originally sold as a way to achieve energy independence and reduce greenhouse gas emissions, ethanol has been a favorite issue of lawmakers.

Ethanol producers have received favorable treatment under the tax code and even a government mandate for its usage. U.S. taxpayers have spent billions of dollars subsidizing ethanol production. But as the boating industry has learned, there’s a price to be paid for ethanol usage, including damage to marine engines and fuel systems; a significant reduction in important wetlands (as land is converted for corn production); an increase in greenhouse gases; and a threat to the safety of American families while recreating on the water.

Subsidies for the corn ethanol industry litter the U.S. tax code, including tax breaks for biodiesel and blender pumps. The tax extender bill being written in the Senate Finance Committee would extend the Alternative Fuel Vehicle Refueling Property Credit, which provides a 30 percent tax break for gas stations installing E-85 blender pumps.

Thankfully, the $6 billion-per-year tax credit was retired by Congress in 2011; but the Renewable Fuel Standard (RFS) mandate still requires oil and gas companies to blend increasing amounts of ethanol with gasoline each year, and it takes special action by the U.S. Environmental Protection Agency to override the mandate. In addition, EPA approved corn biobutanol as a new, advanced biofuel. Corn ethanol has already exceeded its RFS 15-billion-gallon annual mandate, causing numerous unintended consequences, such as higher food and feed grain prices and higher greenhouse gas emissions.

Here’ s a small example of federal programs that enhance corn ethanol usage and production:

• $55 million in grants and loans to advance biofuels facilities and annual production

• $25 million in loan guarantees to advance facilities, including power facilities

• $6.9 million in reimbursement payments for biorefineries to replace fossil fuels

• $200 million to facilities dispensing ethanol fuels in the form of a 30 percent tax credit

• $13.4 billion to master limited partnerships where investors are treated for tax purposes as if they already earned income

• $14 billion as a biodiesel production tax credit of $1.00 per gallon (part of the tax-extender bill to renew)

The list goes on and on.

MRAA believes the mature corn ethanol industry should no longer receive taxpayer support, whether through infrastructure subsidies for ethanol blenders in the tax code or production subsidies through the Department of Agriculture. Contact your Congressional representatives and let them know you want to stop these taxpayer incentives today!

A new University of Nebraska study released April 20 in a publication called Nature Climate Change says eliminating ethanol as a biofuel can actually decrease soil organic carbon. The study claims cellulosic biofuels like ethanol actually generate more greenhouse gases than gasoline.

As expected, the biofuel industry is speaking out against the Nebraska study, calling it deeply flawed and out of step with science.

“MRAA has long supported repeal of the ethanol mandate,” says MRAA president Matt Gruhn. “Not only do boaters have to pay more for ethanol enriched gasoline, but of much more significant concern is the damage ethanol causes to older marine engines and fuel systems. We’ve been telling Congress for years that ethanol creates a bad situation for boaters and the industry, and hopefully a bill will pass this year to stop this public policy that’s gone horribly wrong.”

Now’s the time to reach out to Congress and express your concerns about ethanol, even if you didn’t attend last week’s American Boating Congress in Washington, D.C. Join your industry colleagues by contacting your local representatives and telling them that it’s time to end the current ethanol mandate.

Contacting your Congressional leader(s) is easier than you might think. Simply visit the MRAA website, “Stop the corn ethanol mandate. Support the pair of bills being sponsored by Rep. Bob Goodlatte (R-VA): H.R. 1462, which suspends the current EPA waiver that permits the sale of E-15 and requires a comprehensive assessment by the National Academy of Sciences regarding the effects of mid-level ethanol on marine engines; and H.R. 1461, which would repeal the renewable fuel standard.”

Ethanol levels of 10 percent already cause major problems for boaters, and an increase to 15 percent (E-15) or greater will pose serious mechanical and safety concerns. Ninety-five percent of boats are trailered to the water; fuel pumps containing E-15 will for sure lead to misfueling of boats and damaged engines this spring and summer.

The U.S. Senate voted 96-3 to open debate on a bill that will renew several tax breaks known as the Bush Tax Cuts, first passed in 2008 to help stimulate the economy. Several issues important to marine retailers are included in the tax-extender package, including a return to the $5 million exemption for the estate tax and a federal sales tax deduction for people who purchase boats that live in a state without income tax.

The bill may hit a snag during the Senate floor debate because the expired tax breaks will add an estimated $85 billion to the federal budget deficit. Some Republican lawmakers have indicated that they would like to change the package to lessen the deficit impact; in the pay-as-you-go world of federal legislation, where tax cuts must be met with equal tax increases, the breaks offer no way to pay for themselves.

Based on merit, it’s expected that the bill has the more than 60 votes needed to pass.

MRAA will continue diligently working on this issue. Estate tax reform and maintaining the sales tax break are key issues for marine retailers.

The U.S. Fish & Wildlife Service gave recreational boaters and anglers good news May 9 when it announced program competitive grants totaling $14.27 million to 10 states and Washington, D.C. from the Boating Infrastructure Grant (BIG) program. The Service also will provide $2.48 million to 27 states willing to match smaller, non-competitive grants. These funds will pay for the construction of boat slips for transient boats more than 26 feet in length.

“These grant funds come from the ‘user pays, user benefits’ BIG program of the Sportfish and Boating Trust Fund, which MRAA strongly backs, and help support boating, fishing and many small businesses,” says Matt Gruhn, MRAA president.

The funds come from federal excise taxes and other taxes on fishing equipment and gasoline. They pay for floating docks, fixed piers, mooring buoys, sewage pump-out stations, and other infrastructure to help provide access to the water and local communities for transient boaters.