Expansion of Ethanol Industry Must Continue

Posted March 2, 2007 at 12:31pm

Today, the U.S. ethanol industry stands tall, boasting 113 manufacturing facilities with an annual capacity of nearly 5.6 billion gallons of ethanol. In my state of Illinois alone, there are eight ethanol plants producing more than 900 million gallons of ethanol.

Developing a diversified, robust renewable fuels industry in the United States is crucial in weakening our dependence on foreign sources of oil. For far too long, America has been held dependent on Middle East oil. Now it is imperative that we continue down this path of energy independence and further develop homegrown, environmentally friendly fuels. We must continue to invest in research, incentives and infrastructure for alternative fuels to meet our energy needs.

Not only is ethanol a domestically produced fuel, but it has significant environmental benefits as well. In 2005 alone, the United States reduced greenhouse gas emissions by 7.8 million tons, equal to removing 1.18 million cars from the road. The American Lung Association in Illinois credits ethanol-blended reformulated gasoline with reducing smog-forming emissions by 25 percent since 1990. Additionally, ethanol reduces tailpipe carbon monoxide emissions by as much as 30 percent as well as toxic emissions and particulate matter emissions.

Ethanol is one of the most significant success stories of American manufacturing. From a tiny industry in the 1980s producing a mere 175 million gallons, the U.S. ethanol industry is expanding and is poised to produce more than 6 billion gallons of renewable fuel this year.

Several factors have gone into the success and growth of the ethanol industry, especially the Energy Policy Act of 2005, which included the renewable fuels standard that required the use of 7.5 billion gallons of renewable fuels by 2012. In addition, the volumetric ethanol excise tax credit and the secondary ethanol import tariff have helped build a strong base of ethanol and biodiesel for our domestic transportation sector. The VEETC maintains the ethanol industry’s competitiveness with gasoline by providing blenders with a tax credit for using ethanol. This credit is essential to keeping the production of ethanol strong, especially in the shadow of highly volatile crude oil markets.

Though some have felt the pinch of higher corn prices, it is sound policy to allow the markets to work. Interfering with market dynamics could be detrimental to the long-term success of the ethanol industry and would steer us away from a free-market-based system.

The eight ethanol plants in Illinois add $450 million to the state’s farm income and local economies. Nearly half of all ethanol plants nationwide are farmer-owned, which brings direct economic benefits back to the local, rural businesses and families. Additionally, Illinois uses 333 million bushels of corn for ethanol and will consume more than 327 metric tons of dried distillers grains, a co-product of ethanol used for livestock feed.

My district comprises 30 counties with more than 22 E85 fueling stations. Infrastructure is key to advancing biofuels in this country. Without significant investment in rail, trucks, waterways and increased accessibility at the pump, ethanol will not be able to reach the consumer. The Midwest Ethanol Corridor project involves conversion of gas pumps to E85 pumps in stations along Illinois’ Interstate 55 and Missouri’s Interstate 70. The goal is to add more than 50 new E85 locations across the region — 14 new stations are planned in Illinois alone. Corridor projects like this will support the outward expansion of ethanol and increase availability to American consumers.

Furthermore, it is critical to maintain policies that will continue to support the development of the ethanol industry. The National Corn-to-Ethanol Research Center, located on the campus of Southern Illinois University at Edwardsville, also is vital, as is all ethanol research, to the future of this fuel.

I also want to debunk the myth that producing ethanol uses more energy than what is made. False. The studies that present this premise date back to 1995 and do not consider that increasing corn yields and improved production technologies make ethanol production less energy intensive than ever. In fact, one of the more recent studies on ethanol’s energy balance, conducted by the Department of Agriculture, shows that ethanol contains at least 67 percent more energy than it takes to produce.

Another issue that critics raise about E85 is the lower fuel mileage. Personally, I can live with getting a few less miles per gallon knowing that I am supporting American farmers, not foreign countries with suspect leaders.

Americans, particularly those of us in Congress setting policy, must decide whether we want to increase the use of alternative fuels such as ethanol. I believe we must. The opposite is just more of the same, as we will continue importing oil from countries with unstable governments and possibly even our enemies.

We have made great strides in my 10 years as a Member of Congress, but much more can be done.

We must invest our research dollars in energy-efficiency, cellulosic technologies and alternative fuel sources. We must encourage the development of new ethanol (and other alternative fuel) plants. We must support installation of infrastructure that supports ethanol and other alternative fuels. And we must encourage automobile manufacturers to build ethanol-powered vehicles.

Rep. John Shimkus (R-Ill.) is a member of the Energy and Commerce Committee and co-chairman of the House Biofuels Caucus.