I have been a strong supporter of the use of ethanol for its environmental benefits toward reducing carbon monoxide, particulate matter and toxics. In addition, I believe it benefits the agricultural community through the use of corn. And, I support the use of ethanol as a way to help reduce our dependence on foreign oil.
Mr. Chairman, I particularly want to welcome Gordon Proctor, director of the Ohio Department of Transportation. Mr. Proctor was a member of my transportation team when I was Governor of Ohio and was a leader in quality management. Mr. Proctor also was instrumental in implementing the TRAC system in Ohio for prioritizing transportation projects. The TRAC system enables the state to recognize and fund those projects that are the most needed. I was delighted that Governor Taft elevated him to Director of ODOT. He is one of the most respected transportation directors in this country. I look forward to his testimony today on the effects of ethanol consumption on the Highway Trust Fund.
Ethanol has been beneficial to the environment and the agricultural community. It has been used successfully to improve air quality in areas that use Reformulated Gasoline (RFG). It has also reduced carbon monoxide emissions under the Oxygenated Fuels program in carbon monoxide nonattainment areas.
Like MTBE, another oxygenate used in RFG, ethanol helps lower emissions of volatile organic compounds (VOCs), toxics, carbon monoxide and particulate matter. According to EPA, RFG is responsible for 17 percent reductions in VOC emissions and 30 percent reductions in toxic emissions. Oxygenates, such as ethanol, also reduce the use of aromatics in gasoline, many of which are known or potential human carcinogens.
Unlike MTBE, however, ethanol does not contaminate ground water and drinking water systems.
In addition, the production of ethanol is helping our nation's farmers. The U.S. Department of Agriculture estimates that about 555 million bushels of corn are used to produce about 1.4 billion gallons of fuel ethanol.
I also believe one of the important benefits of using ethanol is that it is domestically produced. While I do not believe that ethanol will take the place of conventional gasoline, I believe it is important to support its growth as a tool to help reduce this country's reliance on foreign oil and gasoline imports. Today, our oil imports have risen to about 55 percent.
However, as chairman of the Transportation and Infrastructure Subcommittee, I believe we need to keep in mind the effects that any increased ethanol use would have on the Highway Trust Fund.
Currently ethanol receives a federal tax credit of 5.4 cents per gallon of gasohol or 54 cents of pure ethanol. OMB currently estimates that the annual revenue loss due to the 5.4-cent tax credit is $800 million. In addition, 3.1 cents of the tax that is collected on ethanol is credited the general fund and not to the Highway Trust Fund.
I strongly believe that as we proceed forward with addressing MTBE, if ethanol use is increased which I support then we need to ensure that states do not lose federal highway funding because of their use of ethanol to help meet air quality standards.
Mr. Chairman, I look forward to today's testimony.