HEMPSTEAD, New York (Reuters) - Republican presidential candidate John McCain said on Wednesday that if elected he would eliminate the tariff on sugar cane-based ethanol and cut a number of subsidies for ethanol.
“I would eliminate the tariff on imported sugar cane-based ethanol from Brazil,” McCain said in a televised debate with Democratic rival Barack Obama.
McCain also said, that unlike Obama, he opposed subsidies for ethanol because they distort the market and could lead to inflation.
U.S. President George W. Bush also opposes the 54-cent-per-gallon tariff on ethanol imports that Congress extended this year until 2010. The tariff has limited U.S. ethanol imports from countries with extensive biofuel programs such as Brazil, which produces 27.5 billion liters of ethanol annually.
In addition, McCain said he would cut the $200 million Market Access Program run by the U.S. Agriculture Department that shares the cost to promote U.S. agriculture exports overseas.
Separately, McCain criticized Obama for saying he would “look” at offshore drilling.
“We’ve got to do it now,” McCain said. “We will reduce the cost of a barrel of oil because we show the world that we have a supply of our own.”
Energy became an important campaign issue this summer as oil prices hit record levels of around $147 a barrel, pushing the price of U.S. gasoline above $4 a gallon. Oil prices have fallen dramatically since then, settling at a 13-month low around $74 a barrel on Wednesday on global economic turmoil.
With “drill here, drill now” as a rallying cry, McCain has pushed to increase domestic production through drilling on the Outer Continental Shelf.
Congress allowed a long-standing ban on drilling off the U.S. coasts to expire at the end of September.
Obama opposed offshore drilling initially, but said later he supported drilling as a part of a larger energy package.
“We only have 3 to 4 percent of the world’s oil reserves and we use 25 percent of the world’s oil, which means that we can’t drill our way out of the problem,” Obama said.
Reporting by Ayesha Rascoe; Editing by Peter Cooney