Sen. Dianne Feinstein opposes the ethanol tax credit, whereas Sen. Ben Nelson supports it. | AP Photos Senators add ethanol credit to tax bill

A key ethanol tax credit has made the cut as part of a deal extending Bush-era tax incentives.

Sen. Dianne Feinstein (D-Calif.) — who opposes extending the excise tax credit for the mainly corn-based gasoline additive — told reporters Thursday that her understanding is that it will be extended in the tax deal at its current level of 45 cents per gallon.


"As far as I know, they're in and they should not be," Feinstein said of the ethanol credit.

Two ethanol industry lobbyists told POLITICO that the deal appears to be a one-year extension at the current 45 cents per gallon.

Sen. Ben Nelson (D-Neb.) — who supports the ethanol tax credit — also said he has been told that it will be included.

Senate Finance Committee Chairman Max Baucus late last week proposed extending the credit for one year at 36 cents per gallon. That lower level also was recommended this summer by House Ways and Means Democrats and backed by the White House. The tax totaled at least $5 billion this year.

The fate of federal grants for wind, solar, geothermal and other renewable energy projects is unclear. Nelson said those will probably be in the tax deal but said the details of that appear to be in flux.

Baucus (D-Mont.) declined to say whether the deal would extend the Treasury's program that provides upfront cash grants for renewable energy projects in place of future tax credits.

In a POLITICO op-ed Thursday, Feinstein said the program “allows renewable energy developers to claim tax incentives. It is rightly credited with maintaining growth in the renewable energy sector in the middle of an economic downturn.

“The program has, so far, supported roughly $18.2 billion in clean energy investment to build 8,600 megawatts of renewable energy generation,” she wrote.

Patrick Reis contributed to this report.