The ethanol tax credit so long maligned by many free market proponents is finally coming under the gun from politicians. Ethanol producers of course don't like it... but liquids producers in the Eagle Ford Shale play should be happy at the support this will add to crude oil and liquids pricing.

"Three senators reached a deal on Thursday to repeal the $6 billion per year ethanol tax credit by the end of July, an agreement that must still be passed by Congress.""The loss of the subsidy could add extra costs for ethanol blenders such as Valero Energy Corp and Marathon Oil Corp, but it is unlikely to reduce demand for corn."

" 'This agreement is the best chance to repeal the ethanol subsidy, and it's the best chance to achieve real deficit reduction,' said Senator Dianne Feinstein from California, who made the deal with senators John Thune from South Dakota, and Amy Klobuchar from Minnesota."

"The deal would reduce the federal deficit this year by $1.33 billion and direct $668 million to extend tax breaks for technologies to help alternative motor fuels including biofuels get to market, Feinstein said."

Read the full news release at reuters.com