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Campaigning for ethanol

Agriculture.com Staff 07/12/2010 @ 11:00pm

Retired General Wesley Clark ran for president in Iowa in 2004 as a Democrat. Thursday he was back in the state campaigning for support for ethanol in Congress, along with Iowa's Agriculture Secretary, Bill Northey, a Republican, and Bruce Rastetter, CEO of Hawkeye Energy Holdings, LLC.

At the Ames office of Hawkeye Energy Holdings, the three leaders said they're hoping that when Congress gets back to work next week, it will remember the needs of the ethanol industry when it considers an energy bill in response to the oil spill in the Gulf of Mexico.

"In Iowa, we have a lot at stake over the next few months," said Northey, who is also a farmer from Spirit Lake, Iowa.

By the end of the year, the 45-cent-a-gallon tax credit for ethanol expires. Congress still hasn't renewed a similar $1-a- gallon tax credit for biodiesel that expired in 2009, resulting in layoffs and a virtual shut down of that renewable energy industry. Ethanol backers are scrambling to make sure that doesn't happen to its much larger sector of the biofuels industry. And they're defending a tariff on imported ethanol that also runs out this year. And, the EPA has promised to reach a decision by the end of this year on whether a higher, 15% blend of ethanol will be allowed in gasoline.

Clark, who is co-chair of Growth Energy, an ethanol trade group, urged Congress to support what he called "the great revolution of the 21st century, the biofuels revolution."

At a time when the economy still struggles to create new jobs, ethanol can do just that, Clark said.

"These are jobs that can never be outsourced. Why wouldn't we want to do this, and do it quickly," Clark asked.

Exactly what kind of legislation might be used to extend the ethanol tax credit isn't known yet. A cap and trade bill introduced in the Senate by Senators John Kerry (D-MA) and Joe Lieberman (I-CT) is considered a politically risky long shot in an election year. But Senator Richard Lugar (R-IN) and Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) have both introduced energy bills that could be changed to include the ethanol industry's wish list, which also includes tax credits for blender pumps that can dispense varying levels of ethanol in gasoline.

Thursday's press conference to boost support for ethanol in Congress was held by Growth Energy.

Last week, three other ethanol industry groups urged Senate Majority Leader Harry Reid (D-NV) to consider ethanol when shaping energy legislation. In a letter to Reid, the Renewable Fuels Association, the American Coalition for Ethanol and the National Corn Growers Association said they hope the energy package not only would address the Gulf oil spill but would include legislation that promotes flex-fuel vehicles and blender pumps, and extend the ethanol tax incentives and the tariff on imported ethanol.

Brian Jennings, executive vice president of the American Coalition for Ethanol, told Agriculture.com later Thursday that his group would like to see the ethanol tax credit extended for five years. In the Senate, Chuck Grassley (R-IA) and Kent Conrad (D-ND) have introduced a bill that would do that. In the House, Representatives Earl Pomeroy (D-ND) and John Shimkus (R-IL) are sponsoring a similar bill.

"We're hoping for that but recognizing there are challenges to it," Jennings said.

Extending tax credits for multiple years could be difficult during an election year when voter concern about the federal deficit is strong.

Although Iowa has influential members of Congress, including Grassley, it has only 5 votes in the House.

When Clark was asked why he was campaigning for ethanol in a state with few members of Congress, he replied.

"There's nothing more powerful than people in a farm state speaking up on what they know best," he said.

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