Union Congress lifted the excise tax, making ethanol affordable again.
American farmers had been watching the use of alcohol engines in Europe with interest when a bumper harvest produced a grain glut, prompting them to lobby President Theodore Roosevelt to repeal the $2.08/gallon tax. Roosevelt, an adversary of the oil industry, backed the Free Alcohol bill and the tax was repealed. Pure ethanol at the pump dropped to around 14 cents per gallon, while gasoline hovered around 22 cents per gallon. Still, only ten ethanol plants were built as a result of the new law.
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