Senators seek bigger market for ethanol
 
By Dan Looker
Successful Farming Business Editor
 
3/17/2005, 2:08 PM CST
 
 

Thursday a bipartisan group of Senators headed by two former Ag Committee chairmen introduced a bill that would require petroleum companies to sell a minimum of 8 billion gallons of renewable fuels by 2012.

The effort, led by Senators Tom Harkin (D-IA) and Richard Lugar (R-IN) has 21 sponsors, 11 Democrats and 10 Republicans, including Senate Majority Leader Bill Frist of Tennessee.

The standard was unsuccessfully sought by the National Corn Growers Association and other farm groups in the last session of Congress, when it was part of an energy bill that stalled in the US Senate.

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The original standard maxed out at 5 billion gallons. The new legislation starts with a requirement of 4 billion gallons in 2006 that phases into the 8 billion gallon requirement by 2012. Last year, US ethanol plants produced about 3.4 billion gallons of ethanol.

Harkin told reporters Thursday that the legislation, if passed, would add support to the growing ethanol and biodiesel industries. He also said he's confident the US can supply that much renewable fuel by 2012.

When asked if there was any evidence that the ethanol industry is expanding too fast, Harkin said, "I've heard some speculation about this, but I don't believe so." He said that with MTBE being phased out of US gasoline, the only remaining octane booster is ethanol and that he expects demand to grow.

The bill is stand-alone legislation that, in theory, could be passed into law on its own. However, it's likely to be attached to the next version of an energy bill.

"The first amendment I intend to offer when the Senate considers the energy bill will be to increase the RFS to 8 billion gallons. We need an aggressive schedule for consumers and farmers," Senator Tim Johnson (D-SD) said in a statement released Thursday.

On Wednesday, the Senate's Environment and Public Works Committee passed a Renewable Fuels Standard that establishes the required amount of ethanol to be used in the United States from the previously proposed level of 5 billion gallons to 6 billion gallons by 2012.

Another co-sponser of the Harkin-Lugar legislation, Senator Chuck Grassley (R-IA), explained his support in a statement Thursday.

"Over the last 3 or 4 years we've been fighting for a 5 billion gallon mandate for the renewable fuels standard. In the meantime, we've had a lot of plants built and still have the need for more ethanol. I happen to think that 6 billion gallons is not enough. I think the higher level is justified because of the acceptance of ethanol, the need for ethanol, and finally, to help agriculture."

Many farm organizations support the 8-billion gallon standard. National Famers Union said Thursday the legislation would increase domestic demand for surplus farm commodities, lower federal outlays of federal farm subsidies, improve the environment, and decrease our reliance of foreign oil.

"With consumer gasoline prices near their highest level in history, and natural gas supplies near record lows, we feel it is imperative that the Congress pass a workable RFS now," said NFU President Dave Frederickson.



 


 

 

 

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