By TIM ALEXANDER
Illinois Correspondent

BLOOMINGTON, Ill. — As biodiesel refineries across the U.S. continue to cease operations and lay off employees, a reworded and pared down jobs bill containing a provision to reinstate the $1 per gallon biodiesel blender’s tax incentive appears to be no closer to passage.

The U.S. Senate rejected the jobs bill last week by a 56-40 vote due to concern over adding to the federal budget deficit. The bill would have retroactively reinstated the biodiesel tax credit to Jan. 1, 2010 and would have remained in effect until the end of the year, as per language inserted into the bill through a recent revision introduced by finance committee chairman Max Baucus (D-Mont.). Two other biodiesel tax breaks – a 10 cent per gallon small agri-biodiesel producer credit and a $1 per gallon credit for biodiesel from biomass – would have also been extended by the bill.

The Senate’s failure to pass the legislation last week means that the nation’s 150 biodiesel plants spread across 44 states will continue to struggle, according to Ron Moore, a soybean producer from Roseville, Ill., and chairman of the Illinois Soybean Assoc.
“Having that credit for the last several years has been a wonderful program, and the lack of it has really caused problems,” said Moore. “Over 20,000 jobs have been lost over the tax extenders bill that Congress can’t pass. A lot of (biodiesel) companies are finding it difficult to be profitable without the certainty that the tax credit gives them. They’ve ended up shutting down production, and when that happens people get laid off.”

An estimated 11 percent of soybean oil produced in the U.S. is used to make biodiesel fuel. Baucus said that he would huddle with lawmakers eager to pass the massive jobs bill to discuss their next move.

“We’re going to keep trying,” Baucus told reporters. “I just hope that day is sooner rather than later.”

Sen. Dick Durbin (D-Ill.) said the bill can’t move forward without more Republican votes. “We’re looking at alternatives that may be more acceptable,” Durbin said.

While Moore said the biodiesel industry is grateful for the efforts of Baucus, Durbin, and other lawmakers to renew the tax credit, he is opposed to the retroactive, one-year extension proposed.

“Instead of just extending it this year, we’d like to see a longer-term tax extenders bill. It would give (biodiesel) companies more certainty and we wouldn’t have to go through the whole political process again in December,” Moore said. “We’ve already been working for the extension for over a year, so it is a bit frustrating for the biodiesel industry.”

Especially frustrating to Moore is the fact that Congress is dragging its heels regarding the extension even as oil continues to spew into the Gulf of Mexico at the rate of around 60,000 barrels per day, while crop fields full of clean, renewable and environmentally-friendly energy sources such as soybeans offer the nation an alternative to fossil fuels.

“The oil spill in the Gulf has, in my opinion, made it even more of a necessity to promote biofuels and the biodiesel tax extenders credit is a huge, huge issue that needs to be resolved,” he said. 
Another reason the tax credit needs to be restored, Moore continued, is because the biodiesel industry is still in its relative infancy.

“We’ve got to have that certainty the credit brings in supporting this industry. This is still a fledgling industry. Only in the past five years have we really started using (biodiesel), and we’re already seeing big reductions in greenhouse gas emissions while we are saving energy,” Moore said.

“(Senate Majority Leader) Sen. Harry Reid (D-Nev.) has said that though they are still negotiating what’s going to be in the next version of the jobs bill, it is going to include the biodiesel tax extenders (provision). But we’re always concerned that things can get left out at the last minute.”

Because of the failure to pass the jobs bill, more than 900,000 unemployed Americans will see their unemployment aid interrupted this week. In addition, physicians will see a 21 percent cut in Medicare reimbursements due to the impasse. The bill also included $1.5 million for disaster relief to farmers who lost crops due to bad weather in 2009.

Those opposed to the bill cite the nonpartisan Congressional Budget Office’s projection that the measure would add some $55 billion to the country’s deficit. Lawmakers rejected a plan offered by Republicans that would fund the bill through spending cuts by a vote of 57-41. That plan, supporters said, would serve to reduce the nation’s budget deficit.