Ethanol gets boost from House energy bill passage

The nation’s energy needs were given a boost by the U.S. House of Representatives with the passage of an energy package this week containing a 36 billion gallon Renewable Fuels Standard. The South Dakota Corn Growers Association (SDCGA) commends the House leadership for including a 15 billion gallon carve-out for corn based ethanol. The provision would double the use of corn for ethanol by 2015.

“An energy bill is the single most important piece of legislation our legislators can provide for all Americans and the positive impacts will ripple through our economies while building energy security for the nation,” said Reid Jensen, president of the SDCGA. “The next step is for the Senate to expedite this bill and get it to the President’s desk before Christmas.”

The passage of the RFS is the SDCGA’s number one priority. The U.S. biofuels industry is a dynamic and growing industry that has revitalized South Dakota. Ethanol is the single most important value added market for farmers. The increased demand for grain used in ethanol processing has increased farm income, created jobs in the agricultural sector and revitalized rural communities where ethanol biorefineries have been located. An ethanol plant producing 100 million gallons a year helps create nearly 1,600 jobs and adds billions of dollars in additional household income to the bottom lines of families.

The RFS provides tremendous opportunities for the state. South Dakota farmers harvested their largest corn crop on record this fall on just 9 percent more corn acres over last year. Corn producers are ready to step up to the challenge of producing enough corn to supply increased ethanol industry demands while still meeting the needs of the nation’s food supply.

“Through biotechnology and improved farming practices, South Dakota producers are leaders in making sure our nation has access to alternative energy sources to reduce our dependence on foreign sources of oil,” said Jensen.

The bill requires that at least 36 billion gallons of renewable fuels are produced by the year 2022 – a significant increase compared to the current requirement calling for 7.5 billion gallons by 2012. The bill also provides for a particularly aggressive standard in the early years of the bill, calling for the use of 9 billion gallons by 2008 – an increase South Dakota Congresswoman Stephanie Herseth Sandlin specifically helped negotiate along with Rep. Colin Peterson of Minnesota.

The following are key provisions of the House energy bill:

• Expands RFS for corn ethanol to 15 billion gallons by 2015
• Requires 9 billion gallons of renewable fuels in 2008 and progressively increases to a 36 billion-gallon requirement by 2022
• Moves the Volumetric Ethanol Excise Tax Credit from 51 cents per gallon to 46 cents per gallon

The attention now turns to the Senate, which is expected to take up the measure next week. The SDCGA is committed to the passage of an energy bill before the end of the year.

“We urge the members of the Senate to mirror the House of Representative’s impressive leadership by securing a future for the biofuels industry,” said Jensen.