Renewable Fuels Provide Benefits

Posted February 20, 2004 at 10:12am

As legislators, we learn to live with the near misses. Many a good bill died on the doorstep of passage, sometimes for good reasons and sometimes the casualty of politics. But in my experience in both the House and Senate, I am hard pressed to think of something that has been so tantalizing, so close within our reach, and yet so elusive as the establishment of a renewable fuels standard.

Sure, the ethanol provisions are important to my state, but this initiative would benefit the entire country, as evidenced by the overwhelming votes in the Senate we have recorded over the past several years. Seventy Senators voted for this provision in November 2003,

with similar, decisive margins before that. The majority of the nation’s governors, the past two administrations, every major agriculture group in the country, major air quality and health organizations, and even the American Petroleum Institute are all behind it.

In its most basic form, the renewable fuels standard simply establishes a requirement that motor fuels contain a modest level of renewably derived fuel. I say modest because at the levels we passed in the Senate it would represent less than 2 percent of our fuel supply. It is, however, a start, and we have to start somewhere if we are going to provide the certainty needed for us to produce our own fuels from not just corn and agricultural products, but also a range of renewably derived materials. Both ethanol and biodiesel can benefit from this initiative. My colleague, Senate Minority Leader Tom Daschle (D-S.D.), has pushed tirelessly since 1998 to implement the renewable fuels standard that the Congress is so close to finally passing.

In its more complex form, the RFS is a multifaceted tool that addresses a wide range of issues such as energy, environment, economic development and agriculture. In short, it is a problem solver. Consider the following as to why we have consistently voted for this measure:

The RFS agreement included a phaseout of methyl tertiary-butyl ether, which has polluted water across the country.

It eliminated the oxygen requirement in federal reformulated gasoline, providing flexibility to the petroleum industry to meet clean air standards.

Clean air standards were maintained, meaning we would not lose the tremendous gains in air quality since the Clean Air Act.

Biodiesel and biomass-derived ethanol were included, providing a jump-start to both those fledgling industries.

And, importantly, a future path for growth was established by creating a gradual annual increase for these fuels, providing market certainty to ensure production. When you can provide that type of market certainty, step out of the way and watch America produce.

When it appeared the RFS would pass two years ago, and that MTBE was on the way out, plants were able to get financing because the uncertainty of marketing the product was removed. We doubled ethanol production over just a four-year period from 1998 to 2002.

All of that growth was indeed predicated on the RFS, and time after time it came within sight of the finish line. Responding to the opportunity, the ethanol industry naturally assumed the final passage was imminent. But now, with production out in front of us, we cannot provide that market certainty the RFS promises. Biodiesel and ethanol plants are stopped dead in their tracks as once again the future has become cloudy.

Even after calculating the tax incentives ethanol receives, the impact of another 2 billion gallons of ethanol production in the United States represents another $5 billion to $10 billion in economic benefits by creating jobs, generating tax revenue and providing a critical lifeline to our rural communities.

Concerns that ethanol production has a net energy loss are simply and unequivocally untrue. There are no compelling reasons to not continue to support, and in fact do all we can to expand America’s only renewable alternative fuel.

Last October was the 30th anniversary of the Organization of Petroleum Exporting Countries oil embargo. Obviously, OPEC members recognize that little has changed and that we have stalled the process even on the pieces that have received overwhelming support in the past. Earlier this month, OPEC voted to raise the price of oil. In effect, they voted to take more of our money overseas and send nothing but dependence back to us. We can do better.

The energy bill has become entangled in a number of issues, and the fiscal responsibility Congress needs to display is real. It seems that the Senate is on the verge of a tentative agreement on an energy bill that will strip the MTBE language, while providing an acceptable RFS. Rather than blocking all attempts, the House of Representatives and the White House now need to throw their support behind a bipartisan agreement and finally deliver a national energy policy to the country.

Sen. Tim Johnson (D-S.D.) is a member of the Energy and Natural Resources Committee.