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Obama Calls on Energy Secretary to Let Stations Expand Access to Renewable Fuels Like E85

Wednesday, April 5, 2006

FOR IMMEDIATE RELEASE
Washington Contact: Robert Gibbs or Tommy Vietor, (202) 228-5511
Illinois Contact: Julian Green (312) 886-3506
Date: April 5, 2006

Obama Calls on Energy Secretary to Let Stations Expand Access to Renewable Fuels Like E85
Effort to Greatly Increase Access to Renewable Fuels Stalled by IRS

WASHINGTON - U.S. Senator Barack Obama (D-IL) today asked Energy Secretary Samuel W. Bodman to affirm the Bush Administration's commitment to reducing our dependence on foreign oil by pressing the Internal Revenue Service (IRS) to immediately allow service stations to take advantage of a law that would greatly increase consumer access to renewable fuels like E85. Secretary Bodman will be in Peoria on Thursday.

"It has now been eight months since this bill became law, and I am frustrated that the Internal Revenue Service (IRS) has yet to make the tax credit available to station owners who want to sell alternative fuels," Obama wrote in a letter to Secretary Bodman. "More frustrating still are reports that an initial IRS interpretation would only allow this tax credit to be used once a year by a taxpayer, even though I and other advocates of the provision intended the credit to be available to companies that own more than one service station and want to install alternative fuel equipment at multiple locations."

Obama asked Secretary Bodman to use his leverage as Energy Secretary to pressure the IRS to correctly interpret legislation Obama strongly supported that would provide a tax credit of up to $30,000 for the installation of equipment that would allow fueling stations to offer alternative fuels. The legislation was signed into law last year but the IRS has yet to make the credit available to station owners.

Obama said he is particularly concerned by initial IRS interpretations of the tax credit that would only allow it to be used once per year per individual. When Obama and other advocates wrote and supported this tax credit legislation last year, they clearly intended the credit to be used by companies owning more than one service station to install alternative fuel equipment at multiple locations.

Obama asked Secretary Bodman to pledge to advocates of the tax credit and to farmers across Illinois who are already doing their part to lessen our dependence on foreign oil to support this legislation. It is estimated that the tax credit would triple the number of stations offering E85 in the first year after its implementation.

"It's time for the federal government to do its part to ensure that consumers who purchase flexible-fuel vehicles have access to alternative fuels," Obama wrote. "One way to accomplish this goal is for you to clearly state your support for an interpretation of the alternative fuels tax credit that encourages gas station chains to offer alternative fuels at all of their locations across the country."

It is estimated that there are more than 4 million flexible-fuel vehicles on the road today but only several hundred stations where E85 is sold.




April 5, 2006

The Honorable Samuel W. Bodman
Secretary
U.S. Department of Energy
1000 Independence Ave., SW
Washington, DC 20585

Dear Secretary Bodman:

Last August, President Bush signed into law the Energy Policy Act, which included a provision I advocated that would provide a tax credit of up to $30,000 for the installation of equipment to allow fueling stations to offer alternative fuels like E-85 to their customers.

It has now been eight months since this bill became law, and I am frustrated that the Internal Revenue Service (IRS) has yet to make the tax credit available to station owners who want to sell alternative fuels. More frustrating still are reports that an initial IRS interpretation would only allow this tax credit to be used once a year by a taxpayer, even though I and other advocates of the provision intended the credit to be used by companies owning more than one service station that want to install alternative fuel equipment at multiple locations.

During your visit to Peoria tomorrow, I hope you will assure me and the thousands of farmers across the state already doing their part to lessen our dependence on foreign oil that you share our commitment to alternative fuels. The U.S. auto industry is also taking significant steps in this area by committing itself to producing hundreds of thousands of new flexible-fuel vehicles (FFVs) in the coming years.

Now it's time for the federal government to do its part to ensure that consumers who purchase FFVs have access to alternative fuels. One way to accomplish this goal is for you to clearly state your support for an interpretation of the alternative fuels tax credit that encourages gas station chains to offer such fuels at all of their locations across the country.

I hope that you will commit to me and the people of Illinois that you will use your position as Secretary of Energy to encourage the IRS to interpret this law as it was intended and increase America's access to alternative fuels. Only then can we break what the President himself called America's "addiction" to foreign oil.

Sincerely,

Barack Obama
United States Senator