"An extension of the major U.S. ethanol subsidy 'is part of the deal at the moment' in negotiations for an omnibus tax bill, but the size and lifespan of the subsidy are not set yet, a trade group said on Wednesday.

The chairman of the Senate Budget Committee told reporters ethanol 'was in a separate section of things to be resolved' and there was no decision on a subsidy rate. Chairman Kent Conrad discussed the issue with fellow Democrats.

The 45-cent-a-gallon excise tax credit for ethanol is scheduled to expire on Dec 31. So would a 54-cent-a-gallon tariff on imported ethanol and a 10-cent-a-gallon credit for small producers of ethanol.

In a statement, the Renewable Fuels Association said an extension of the credit 'is part of the deal at the moment,' according to congressional and Obama administration sources."

Charles Abbott reports for Reuters December 9, 2010. [2]