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House to Vote on Ethanol Subsidy

By Joe Benton
ConsumerAffairs.com

June 21, 2006

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Facing a Fourth of July recess crowded with constituents angry over rising gasoline prices, the House of Representatives plans to vote on a bill to use fuel economy fines to subsidize installing ethanol pumps at some filling stations.

Automakers whose fleets do not meet federal corporate average fuel economy standards, or CAFE, pay the fuel economy fines. The amounts vary from year to year but average out to about $20 million a year.

That bill and a number of other measures dealing with fuel prices and supply are on the House schedule for next week which Republican leaders are calling “energy week” in the House. House members then head home for Independence Day encounters with voters steaming over $3-a-gallon gasoline.

Fuel economy fines would "kick start" expansion of a national distribution system for E85, says Rep. Mike Rogers, R-Michigan, the bill's sponsor.

E85 is fuel that is 85 percent ethanol and 15 percent gasoline.

U.S. automakers are advertising E85 as a remedy for the energy problems now facing consumers. Automakers already have built more than 5 million vehicles capable of using E85 and are adding about 1 million more each year.

E85 fuel is available at about 750 of the 170,000 filling stations in the country.

Rogers says his bill, funding $30,000 grants to independent stations rather than oil companies, could double the number of E85 pumps in a year.

Two German automakers, BMW and Mercedes-Benz, historically pay the heaviest fuel economy fines.

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