The Associated Press
SHELBY - Construction of New York's first dry mill ethanol plant is scheduled to begin this summer, with the state contributing nearly $6 million as part of a strategy to reduce dependence on foreign energy, Gov. George Pataki said Monday.
Western New York Energy's $87.4 million Orleans County facility is expected to produce about 50 million gallons of the fuel each year.
The clean-burning, corn-based fuel is combined with gasoline to produce a blended, higher octane fuel. The plant will buy an estimated 6 million bushels of corn each year, opening a new market for the state's farms. It will employ 58 people.
“Western New York Energy's new facility ... will help us take advantage of this opportunity to reduce our dependence on unstable foreign energy supplies,” Pataki said near the 144-acre site of the future plant in Shelby, a town of about 5,400 that sprang up around waterfall-powered saw- and gristmills in the 1800s.
Pataki was the first northeast governor to join the Governors Ethanol Coalition.
Sen. Charles Schumer, D-N.Y., a longtime critic of the Bush administration's energy policy, said New York needs more ethanol plants.
The new plant “is a great thing. Ethanol is not going to solve our gas problems, but every little bit helps when the price is so high,” said Schumer.
The average price of unleaded gasoline in New York was $3.12 per gallon Monday, with the national average at $2.90, according to the motorists' club AAA.
Schumer wants to add tax breaks for businesses that expand ethanol production to states like New York and California that rely largely on ethanol shipped from the Midwest at greater cost to drivers.
The western New York plant is expected to begin production in January 2008. Besides the $6 million in state incentives, the U.S. Department of Agriculture is considering a $25 million package of loans and incentives, said U.S. Rep. Thomas Reynolds, R-N.Y.
“This new facility will help western New York become a leader in helping to reduce America's reliance on foreign oil,” Reynolds said.
Besides ethanol, the facility will produce two byproducts that will be marketed for sale: carbon dioxide, used for beverage carbonation and freeze drying, and distiller's dried grains, a high-protein livestock feed.
In Albany, the Republican-led Senate has repeatedly passed a plan that would collect state and local sales taxes on only the first $2 per gallon of gasoline and diesel.
Senate Majority Leader Joseph Bruno says the bill would save New Yorkers $450 million a year.
A Democrat-led Assembly bill proposed Monday would end the state sales tax, which increases the cost of gas at the pump as the wholesale price increases. Instead, a “user tax” of 8 cents per gallon would be created and capped at that level “forever,” according to the Assembly proposal. Oil companies that fail to pass along the tax savings to consumers would be subject to fines up to three times the amount of their windfall.
The Assembly would also allow local governments to set their own fuel tax, make it easier for the state attorney general to prosecute price gouging, and encourage development of alternative fuels. The Assembly said its proposal would “effectively” limit the sales tax to amounts less than $2 a gallon, but not as directly as the Senate bill.
Neither bill contains identical provisions, which would be needed for a bill to have a chance at becoming law. Both proposals, however, use the concept of reducing taxes to cut the price of fuel.
“From a pure economics perspective, it's not a good argument,” said Frank Mauro, a fiscal analyst for the union-backed Fiscal Policy Institute. “That would result in increased demand.”
However, “the government is in a bind because people feel burdened by the increased prices,” Mauro said. “I think it might be appropriate in a democracy for government to respond to public outrage. The problem is, it could hurt in the long rather than help.”
waterfall-powered saw- and gristmills in the 1800s.
Pataki was the first northeast governor to join the Governors Ethanol Coalition.
Sen. Charles Schumer, D-N.Y., a longtime critic of the Bush administration's energy policy, said New York needs more ethanol plants.
The new plant “is a great thing. Ethanol is not going to solve our gas problems, but every little bit helps when the price is so high,” said Schumer.
The average price of unleaded gasoline in New York was $3.12 per gallon Monday, with the national average at $2.90, according to the motorists' club AAA.
Schumer wants to add tax breaks for businesses that expand ethanol production to states like New York and California that rely largely on ethanol shipped from the Midwest at greater cost to drivers.
The western New York plant is expected to begin production in January 2008. Besides the $6 million in state incentives, the U.S. Department of Agriculture is considering a $25 million package of loans and incentives, said U.S. Rep. Thomas Reynolds, R-N.Y.
“This new facility will help western New York become a leader in helping to reduce America's reliance on foreign oil,” Reynolds said.
Besides ethanol, the facility will produce two byproducts that will be marketed for sale: carbon dioxide, used for beverage carbonation and freeze drying, and distiller's dried grains, a high-protein livestock feed.
In Albany, the Republican-led Senate has repeatedly passed a plan that would collect state and local sales taxes on only the first $2 per gallon of gasoline and diesel.
Senate Majority Leader Joseph Bruno says the bill would save New Yorkers $450 million a year.
A Democrat-led Assembly bill proposed Monday would end the state sales tax, which increases the cost of gas at the pump as the wholesale price increases. Instead, a “user tax” of 8 cents per gallon would be created and capped at that level “forever,” according to the Assembly proposal.
Oil companies that fail to pass along the tax savings to consumers would be subject to fines up to three times the amount of their windfall.
The Assembly would also allow local governments to set their own fuel tax, make it easier for the state attorney general to prosecute price gouging, and encourage development of alternative fuels.
The Assembly said its proposal would “effectively” limit the sales tax to amounts less than $2 a gallon, but not as directly as the Senate bill.
Neither bill contains identical provisions, which would be needed for a bill to have a chance at becoming law. Both proposals, however, use the concept of reducing taxes to cut the price of fuel.
“From a pure economics perspective, it's not a good argument,” said Frank Mauro, a fiscal analyst for the union-backed Fiscal Policy Institute. “That would result in increased demand.”
However, “the government is in a bind because people feel burdened by the increased prices,” Mauro said. “I think it might be appropriate in a democracy for government to respond to public outrage. The problem is, it could hurt in the long rather than help.”
Western New York Energy's $87.4 million Orleans County facility is expected to produce about 50 million gallons of the fuel each year.
The clean-burning, corn-based fuel is combined with gasoline to produce a blended, higher octane fuel. The plant will buy an estimated 6 million bushels of corn each year, opening a new market for the state's farms. It will employ 58 people.
“Western New York Energy's new facility ... will help us take advantage of this opportunity to reduce our dependence on unstable foreign energy supplies,” Pataki said near the 144-acre site of the future plant in Shelby, a town of about 5,400 that sprang up around waterfall-powered saw- and gristmills in the 1800s.
Pataki was the first northeast governor to join the Governors Ethanol Coalition.
Sen. Charles Schumer, D-N.Y., a longtime critic of the Bush administration's energy policy, said New York needs more ethanol plants.
The new plant “is a great thing. Ethanol is not going to solve our gas problems, but every little bit helps when the price is so high,” said Schumer.
The average price of unleaded gasoline in New York was $3.12 per gallon Monday, with the national average at $2.90, according to the motorists' club AAA.
Schumer wants to add tax breaks for businesses that expand ethanol production to states like New York and California that rely largely on ethanol shipped from the Midwest at greater cost to drivers.
The western New York plant is expected to begin production in January 2008. Besides the $6 million in state incentives, the U.S. Department of Agriculture is considering a $25 million package of loans and incentives, said U.S. Rep. Thomas Reynolds, R-N.Y.
“This new facility will help western New York become a leader in helping to reduce America's reliance on foreign oil,” Reynolds said.
Besides ethanol, the facility will produce two byproducts that will be marketed for sale: carbon dioxide, used for beverage carbonation and freeze drying, and distiller's dried grains, a high-protein livestock feed.
In Albany, the Republican-led Senate has repeatedly passed a plan that would collect state and local sales taxes on only the first $2 per gallon of gasoline and diesel.
Senate Majority Leader Joseph Bruno says the bill would save New Yorkers $450 million a year.
A Democrat-led Assembly bill proposed Monday would end the state sales tax, which increases the cost of gas at the pump as the wholesale price increases. Instead, a “user tax” of 8 cents per gallon would be created and capped at that level “forever,” according to the Assembly proposal. Oil companies that fail to pass along the tax savings to consumers would be subject to fines up to three times the amount of their windfall.
The Assembly would also allow local governments to set their own fuel tax, make it easier for the state attorney general to prosecute price gouging, and encourage development of alternative fuels. The Assembly said its proposal would “effectively” limit the sales tax to amounts less than $2 a gallon, but not as directly as the Senate bill.
Neither bill contains identical provisions, which would be needed for a bill to have a chance at becoming law. Both proposals, however, use the concept of reducing taxes to cut the price of fuel.
“From a pure economics perspective, it's not a good argument,” said Frank Mauro, a fiscal analyst for the union-backed Fiscal Policy Institute. “That would result in increased demand.”
However, “the government is in a bind because people feel burdened by the increased prices,” Mauro said. “I think it might be appropriate in a democracy for government to respond to public outrage. The problem is, it could hurt in the long rather than help.”
waterfall-powered saw- and gristmills in the 1800s.
Pataki was the first northeast governor to join the Governors Ethanol Coalition.
Sen. Charles Schumer, D-N.Y., a longtime critic of the Bush administration's energy policy, said New York needs more ethanol plants.
The new plant “is a great thing. Ethanol is not going to solve our gas problems, but every little bit helps when the price is so high,” said Schumer.
The average price of unleaded gasoline in New York was $3.12 per gallon Monday, with the national average at $2.90, according to the motorists' club AAA.
Schumer wants to add tax breaks for businesses that expand ethanol production to states like New York and California that rely largely on ethanol shipped from the Midwest at greater cost to drivers.
The western New York plant is expected to begin production in January 2008. Besides the $6 million in state incentives, the U.S. Department of Agriculture is considering a $25 million package of loans and incentives, said U.S. Rep. Thomas Reynolds, R-N.Y.
“This new facility will help western New York become a leader in helping to reduce America's reliance on foreign oil,” Reynolds said.
Besides ethanol, the facility will produce two byproducts that will be marketed for sale: carbon dioxide, used for beverage carbonation and freeze drying, and distiller's dried grains, a high-protein livestock feed.
In Albany, the Republican-led Senate has repeatedly passed a plan that would collect state and local sales taxes on only the first $2 per gallon of gasoline and diesel.
Senate Majority Leader Joseph Bruno says the bill would save New Yorkers $450 million a year.
A Democrat-led Assembly bill proposed Monday would end the state sales tax, which increases the cost of gas at the pump as the wholesale price increases. Instead, a “user tax” of 8 cents per gallon would be created and capped at that level “forever,” according to the Assembly proposal.
Oil companies that fail to pass along the tax savings to consumers would be subject to fines up to three times the amount of their windfall.
The Assembly would also allow local governments to set their own fuel tax, make it easier for the state attorney general to prosecute price gouging, and encourage development of alternative fuels.
The Assembly said its proposal would “effectively” limit the sales tax to amounts less than $2 a gallon, but not as directly as the Senate bill.
Neither bill contains identical provisions, which would be needed for a bill to have a chance at becoming law. Both proposals, however, use the concept of reducing taxes to cut the price of fuel.
“From a pure economics perspective, it's not a good argument,” said Frank Mauro, a fiscal analyst for the union-backed Fiscal Policy Institute. “That would result in increased demand.”
However, “the government is in a bind because people feel burdened by the increased prices,” Mauro said. “I think it might be appropriate in a democracy for government to respond to public outrage. The problem is, it could hurt in the long rather than help.”
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