SDCGA praises Senate for Energy Bill passage

With visionary leadership from South Dakota’s Senators, a 15 million gallon corn ethanol carve out was protected and passed by overwhelming majority out of the Senate in a comprehensive Energy Bill package this week. The South Dakota Corn Growers Association (SDCGA) extols the Senate’s expedited actions to direct the Energy Bill to the President’s desk before Christmas. 

“The ethanol industry has grown faster than we could have imagined and the foresight of Congress to provide for future growth will lead this nation to greater energy security while bolstering our agricultural industry and local economies,” said Reid Jensen, president of the SDCGA. “The SDCGA has worked closely with Sens. Johnson and Thune to ensure the Energy Bill contained a corn-based RFS and the SDCGA thanks them for their tireless dedication and leadership to this effort.”

The Energy Bill passed 86-8 in the Senate and now heads back to the House for a final vote and, if successful will be sent to the president’s desk. The House is expected to vote early next week. The provision would double the use of corn for ethanol by 2015.

“The passage of this energy bill is a historic moment for South Dakota,” said Sen. John Thune. “The RFS provisions in the bill will provide a tremendous boost to South Dakota farmers and the ethanol industry. The South Dakota Corn Growers and ethanol producers did yeoman work on this bill and helped me and my office get it over the goal line.”

The current RFS requires oil companies to blend 7.5 billion gallons of ethanol with their gasoline by 2012. The nation’s ethanol production will surpass that production long before 2012 forcing the industry to hit a blend wall. In the package passed out of the House and Senate, oil companies would be required to blend at least 15 billion gallons of corn-based ethanol with their gasoline by 2015 and 21 billion gallons of cellulosic ethanol by 2022.

“Ethanol production is a $2 billion industry in South Dakota and the passage of the Energy Bill is the single most important safeguard to make sure our South Dakota ethanol industry does not stagnate but will have the opportunity to thrive and grow,” said Jensen. “The viability of our South Dakota corn producers and local economies hang on the passage of this bill into law.”

With the new RFS the 2008 blending requirement will increase from 5.4 billion gallons to 9 billion gallons. Simply put, that is a strong safety net for the current ethanol industry as substantial new production will come on-line.

“The RFS is a cornerstone of the United States national energy policy and passage of an expanded RFS requiring a minimum of 9 billion gallons of ethanol in 2008 provides tremendous opportunities for South Dakota’s agriculture producers and rural communities,” said Sen. Tim Johnson. “As a senior member of the Senate Energy and Natural Resources Committee, I am glad that we are building on the successes of the Energy Policy Act of 2005 that created the first ever nationwide RFS. The bill passed by the Senate yesterday recognizes the tremendous growth in biofuels by setting an ambitious schedule for renewable fuel use and ensuring a strong future for biofuel production in our state. The leadership of the South Dakota Corn Growers Association has been instrumental in pushing this bill over the finish line and to the President’s desk for his signature.”

The RFS for corn ethanol is part of a larger standard of 36 billion gallons for all renewable fuels. Key provisions in the bill include:

  • Requirement of 9 billion gallons of renewable fuels in 2008,
    progressively increasing to the 36 billion gallon requirement by 2022, including a 1 billion-gallon mandate for biodiesel;
  • Corporate Average Fuel Economy (CAFE) standards for advanced
    biofuels;
  • Studies on the feasibility of ethanol pipelines, higher blend
    levels and the optimization of flex fuel vehicles.
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