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Corn+Soybean Digest

Biofuel Planets Finally Align

It appears hard work and karma have finally teamed up. The Energy Bill, which includes the Renewable Fuels Standard (RFS), is on its way to conference committee this month.

You've probably read and heard plenty over the past couple years about the RFS. It's almost become a religion unto itself.

In a nutshell, the 5-billion gallon RFS portion of the Energy Bill could triple U.S. usage of biofuels such as ethanol and biodiesel by 2012. The provision would also eliminate the 2% reformulated gasoline oxygenate requirement and ban the additive methyl tertiary butyl ether (MTBE), a compound used to meet oxygenate requirements that has been found to contaminate drinking water.

In a bizarre twist of events, after drawn out debate over contentious amendments, the Senate passed last year's energy bill in an 84 to 14 vote and adjourned for the August recess. S. 14, the Energy Bill developed in the Senate energy committee this year, was replaced with the Energy Bill passed overwhelmingly by the Senate in 2002. There were no major differences between the legislation concerning the RFS.

Other provisions in the bill require the federal government to use ethanol and biodiesel in its transportation fleets — when possible — and to provide tax credits for renewable fuel production.

“It was a brilliant political strategy of Minority Leader Tom Daschle (D-SD) to suggest substituting last year's bill,” says National Corn Growers Association (NCGA) President Fred Yoder. “It was true statesmanship of Chairman Pete Domenici (R-NM) to accept it.”

Domenici, chairman of the Senate energy committee, will chair the Senate-House conference committee, where the differences between the two chambers' bills will be reconciled. The House passed its Energy Bill in April.

Even though the Energy Bill made it to conference committee last year and died, early indicators show that the RFS is on track for passage before Congress is scheduled to adjourn in October.

“The Senate passage this year is huge. To me, the die is cast. We're going to come out of conference with an RFS,” says Mark Palmer, director of public policy for NCGA. “Folks are committed to getting an Energy Bill done because we need a comprehensive energy policy.”

Passage of the RFS is a top agenda item for the American Soybean Association (ASA) and they, too, are encouraged by the recent Senate blowout vote.

The Senate bill includes the ASA-backed biodiesel tax incentive. It's a volumetric excise tax credit, based on the percent of biodiesel blended with diesel.

“I believe we still have some hurdles, but this Senate action shows commitment to the use of biofuels,” says Krysta Harden, ASA's Washington representative. “Congress now needs to conclude its work and get strong renewable policy on the books.”

With more than 55% of the oil we consume coming from the chaotic Middle East, it's time for this bill and the RFS to be a slam dunk. Contact your senators and representatives and let them know how important this legislation is to you.

Hopefully, the next time you read about biofuels in this magazine, it will be to provide details on the new bill President Bush has just signed into law.

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