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Biodiesel advocates watching energy bill
By MEGAN KUHN
Assistant Editor

ST. LOUIS, Mo. — A national agriculture group is asking Congress to not forget biodiesel in future energy package legislation.

“Biodiesel is an environmentally sound alternative to petroleum diesel that is made here in the United States using soybeans grown on American soil,” said American Soybean Association (ASA) president. “Biodiesel is a top-notch product that lessens our dependence on foreign oil, improves the quality of air we breathe and stimulates rural economies where it’s produced.”

Metz said that the U.S. biodiesel industry has expanded production from just 2 million gallons in 2000 to more than 150 million gallons projected this year. The number of production facilities continue to grow as well. There are 65 operational biodiesel plants across the country with 50 more currently under construction.

“Biodiesel has come a long way in a short time,” Metz said. “Two key government programs have fueled biodiesel’s growth. They are the biodiesel tax incentive, enacted by Congress in 2004, and the CCC Bioenergy Program, initiated by the USDA in 2001.”

He added that the small biodiesel producer tax credit from last summer’s energy bill is also having some effect.

However, the small producer tax credit and the biodiesel tax incentive are both set to expire in 2008, while the CCC Bioenergy Program ends after this fiscal year.

Because the ASA feels that the biodiesel industry needs these programs to continue to grow, it announced biodiesel priorities for the next energy bill during a teleconference May 10.

The three-point plan is designed to enable biodiesel producers to manufacture greater quantities of the fuel, according to the ASA. The group is asking Congress to include the following in any energy package legislation:

•Extension of the volumetric biodiesel tax incentive
•Extension of small agri-biodiesel producer credit
•Authoring and funding a CCC Biodiesel program

“By taking these actions, we estimate on-road diesel supplies could be increased by 2 percent by 2015,” said Metz.

Representative Collin Peterson (D-Minn.), who also participated in the teleconference, said that while biodiesel is not as hot of an item as ethanol right now, he thinks it continues to gain attention.

“In Washington, we are focused on the CCC Bioenergy Program and working to get the tax credits extended,” said Peterson, the Ranking Minority Member of the House Committee of Agriculture. “We plan to continue to work on these areas to get the structure in place so this industry will develop.”

Peterson said that he would like to see the tax credits extended for a longer term because it makes securing funds easier for those looking to build production facilities.

“The public is behind us on this,” he added. “They want to get off foreign oil. We are doing what we can to get awareness.”

Metz said that with the rising gas prices increased use of biodiesel benefits everyone, not just those using the fuel.

“Ninety-five percent of all freight in this country is moved by diesel fuel, so it does affect every household,” he said.

Harkin announced biofuels policy
In other renewable fuels news, Senator Tom Harkin (D-Iowa) recently announced aggressive new biofuels policy that includes new target for ethanol and biodiesel production, more flex-fuel vehicles (FFVs) and E85 pumps. He plans on introducing a legislative package this week containing this proposal.

“Americans now know all too well how painful our dangerous and costly addiction to foreign oil is,” said Harkin. “With soaring fuel prices, we must take a much more aggressive approach to boosting home grown biofuels. My proposal will boost the use of ethanol and biodiesel in our fuel supply. And it will ensure America’s vehicles can use and American’s drivers can find renewable fuels.”

Harkin’s proposal includes a new renewable fuels standard (RFS) that calls for 60 billion gallons of ethanol and biodiesel to be included in the U.S. motor vehicle fuel supply annually by the year 2030. The final RFS in the current energy bill is 7.5 billion gallons by 2012.

The plan also calls for increasing the number of gasoline stations that carry blends of 85 percent ethanol (E85). Harkin proposes requiring large oil companies to install E85 pumps at their stations, increasing by five percentage points annually over the next 10 years. This would result in about 25 percent of all gasoline stations nationwide having E85 pumps available within a decade.

The final point in Harkin’s plan would direct automakers to gradually increase flex-fuel vehicle production, increasing 10 percentage-point increments annually, until nearly all vehicles sold in the U.S. are FFVs within 10 years.

“We must do much more to increase our use of home-grown ethanol and biodiesel,” Harkin said. “This proposal lays the roadmap to a long-term ramp-up in domestically produced renewable fuels.

“We can and we must achieve these aggressive goals to attain the energy security that we so critically need to have national and economic security for America.”

This farm news was published in the May 17, 2006 issue of Farm World.

5/17/2006