Fuels standard would increase ethanol consumption
By Janet Kubat Willette
jkubat@agrinews.com
Renewable energy legislation is gaining momentum in Washington.
The renewable fuels standard calls for increasing ethanol consumption by 200 million gallons to 300 million gallons annually to 5 billion gallons by 2012.
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Trevor Guthmiller, American Coalition for Ethanol executive director, testified in favor of similar legislation in April 2000, as did former CIA director James Woolsey. Woolsey backed the renewable fuels legislation from an energy security standpoint, Guthmiller said.
Groundwork laid
Although the 2000 legislation didn't advance, it laid the groundwork for the 2002 legislation, Guthmiller said. Now, the American Petroleum Institute, the American Coalition for Ethanol and several environmental groups support the legislation.
"It's the culmination of a lot of work by a lot of people to get to this point," he said.
Renewable fuels legislation is being discussed as part of the Senate energy bill, S.517. Similar legislation isn't included in the House version of the energy bill, so it would have to be added in conference committee.
The Senate is expected to continue working on the energy bill after its Easter recess, with passage expected in mid-April. Then the bill will go to conference committee.
The Bush administration has indicated its support of the legislation and it has bi-partisan Senate support, Guthmiller said.
Ralph Groschen, MDA specialist for agricultural marketing, said he's troubled by the fact that oxygenate requirement would be allowed to go away with acceptance of the renewable fuels standard. The environmental benefits of ethanol are more important now than ever before, he said.
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The standard allows for greater growth of the ethanol industry than an oxygenate requirement, said Trevor Guthmiller, American Coalition for Ethanol executive director. But the environmental benefits are still key, as is ethanol's role as a homegrown fuel.
More benefits
The new legislation expands the definition of an eligible small ethanol producer from 30 million gallons to 60 million gallons so small cooperative ethanol producers will receive the same tax benefits as large companies, said Sen. Charles Grassley, R-Iowa.
It creates a production tax credit for electricity generated from livestock waste and extends the production tax credit for energy generated by wind for five years. It continues the tax credit for the production of biomass and extends the tax credit for production of electricity from poultry waste.
It provides an income tax credit and excise tax rate reduction for biodiesel fuel mixtures and also mandates ethanol be included in every gallon of gasoline.
But Grassley isn't waiting for the renewable fuels standard. He said he will introduce an amendment after Easter recess overruling Davis' decision to delay the MTBE ban.
Agri News senior staff writer Jean Caspers-Simmet contributed to this article.
