Grain Bins


SDCGA applauds Senate passage of energy package

Posted on June 22, 2007

The nation’s energy needs were given a boost today by the U.S. Senate’s passage of an energy package which increases the current Renewable Fuels Standard (RFS) for corn-based ethanol. The South Dakota Corn Growers Association (SDCGA) applauds the expanded requirements and gives credit to the visionary leadership which led to the strong biofuels legislation.

The comprehensive energy legislation took the 7.5 billion gallon renewable fuels standard, passed in July of 2005, to new levels by increasing the minimum to 36 billion gallons of renewables by 2022. Fifteen billion gallons will come from corn-based ethanol.

“This is a huge stepping stone for the renewable fuels industry which will set the foundation for continued ethanol growth,” said Reid Jensen, president of the SDCGA. “The SDCGA played a key role in the original RFS package, which in 2005 was appropriate. No one could have predicted the industry would grow at the rate it has and the Senate is commended for recognizing that growth and taking important steps in supporting its growth with an expanded energy policy.”

South Dakota Senator John Thune worked to protect key components in the updated energy package. Senators Gregg (R-NH) and Inhofe (R-OK) offered amendments that would have been damaging to corn growers and the growing ethanol industry and Sen. Thune took action.

Specifically, Sen. Gregg’s amendment would have repealed the .54 cent secondary tariff on ethanol, which is the offset to the 51 cent blender’s credit and without it in place, American tax dollars would go to subsidize Brazilian ethanol. Senator Thune played a major role in the debate which led to the amendment’s defeat.

“If the tariff were eliminated, we would trade our dependence on foreign sources of oil for a new and growing dependence on foreign ethanol. This tradeoff is dangerous and will undermine our hard fought efforts to grow our domestic ethanol industry, which is creating jobs and economic growth in America’s heartland,” said Sen. Thune.

“The outstanding leadership by Sen. Thune is commendable and his tireless dedication to the biofuels industry in South Dakota and nationwide will set the stage for this industry to achieve the levels it is poised to do,” said Jensen. “As South Dakota’s ethanol industry continues to develop, the support of our Congressional delegation is imperative.”

Additionally this bill included studies on the feasibility of ethanol pipelines, higher blend levels and the optimization of FFVs.

“These are all important elements in creating greater energy security for this nation and South Dakota corn producers will benefit by greater market opportunities,” said Jensen.

Additionally, the bill calls for:

* A 20 percent greenhouse gas (GHG) reduction
standard for conventional biofuels that allows existing plants to be
grandfathered in to the law;

* Establishment of a 50 percent GHG reduction
standard for advanced biofuels;

* Corporate Average Fuel Economy (CAFE) standards
for automobiles to increase to 35 miles per gallon by 2020;

* Establishes a goal of increasing the nation's
flexible fuel vehicle fleet by 50 percent; and

* Studies relating to the impacts of expansion of
biofuels production on various industrial sectors, as well as an
environmental impact study.

With the Senate passage, the legislation will now head to the House of Representatives.

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

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