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Incoming Ag Committee head backs U.S. biofuel production

A day after he was elected chairman of the House Agriculture Committee in early December, U.S. Rep. Collin Peterson, a Minnesota Democrat, held a press conference where he spent the bulk of his time speaking on the need for a vibrant biofuel industry.

For those hoping for an extension of the current farm bill, Petersen offered little. But he wasn't dismissive or hostile to the current bill's structure.

“You can expect to see a (farm) bill that looks similar to what we have now. There are a couple of things you've heard me talk about before that I want to try and concentrate on. (One is) a permanent disaster program.

“Once again, we're in the process of trying to pass an ad hoc disaster bill. That doesn't look like it'll happen during this lame-duck (session).

“But we'll be taking up this fight again right after the first of the year and hope it'll be successful once (Democrats) take control…

“I'd like to see the secretary (of agriculture) have permanent authority so we don't have to do these ad hoc bills every couple of years.”

The other area Petersen wants “a lot of focus on” in the new farm bill is renewable fuels.

“I think it's safe to say this is the most exciting thing that's happened in agriculture in my lifetime. Farmers are excited about this. Young farmers are coming back to the farm and people are making money.”

It's a great opportunity for agriculture, he said.

“Corn ethanol is doing very well and is very profitable. They're building plants as fast as they can.

“Frankly, they don't need a lot of help. We need to get out of the way and not screw things up.”

Long-term, Petersen said, his goal is to have more than half of the United State's fuel produced in agriculture. Accomplishing that “means we'll be moving beyond corn to cellulosic ethanol.

“A lot of focus of the (next farm) bill will be on cellulosic feed stocks, with research and, potentially, a CRP-type program where we'd pay people so much per acre to grow the feed stocks across the country.

“That's basically to try and determine what's the biomass crop in each (region) of the country. What will produce the most biomass for the least cost?”

Petersen expects such cellulosic plants will be commercialized and “ready to go in five or six years. Initially, they'll be run on agriculture waste like wheat straw, rice straw … and so forth.

“We want to be ready to go when these plants are up and operational. When this industry is ready to take off in five or six years, we must be ready to provide the feed stocks to fuel it.”

Several days prior, Sen. Tom Harkin, an Iowa Democrat who will soon take over the Senate Agriculture Committee, said he'd be willing to consider doing away with the foreign ethanol tariff. When a reporter asked about Harkin's comments, Petersen was surprised.

“Are you serious? You didn't mishear him? I'm not in favor of that.

“The last thing we need is any foreign ethanol being imported into the United States. We can produce plenty for the demands here.

“This is a product not under the WTO, and I have no interest in it being put under the WTO.

“I think to stand up the cellulosic ethanol industry we need to keep this product in the United States and under our control until the industry is established, running and on its feet. I don't how long that'll take — probably at least 10 years.”

Petersen recently returned from a trip to Brazil — a country that produces ethanol in excess.

“They were bringing this up and I let them (know), from my perspective, we're not interested.…

“The Brazilians are trying to build a case that we need to get more (of their) ethanol (into the United States) and therefore we should lift our tariffs. I don't agree at all.”

Petersen said he's very concerned that politicians set the proper foundation for the U.S. biofuel industry.

“I've been working on ethanol for 30 years. … Now everyone is trying to help ethanol out. It's the most popular thing you could think of.

“So there are all kinds of bills being introduced, all kinds of members of Congress trying to help it (along).

“In my judgment, probably half the bills introduced would do more harm than good. So we need to make sure whatever we're doing will benefit the industry and fix problems that exist, not problems that existed 10 years ago but don't any longer.

“Things are going along well. But people are introducing bills to, for example, set up loan guarantees so people can buy into these (ethanol) plants. Wall Street and other big people are doing their darnedest to come in and get control of this industry and buy into these plants.

“They haven't been able to because the farmers are there and there's no need for (other investors') money. If you put a loan guarantee deal in and screw up the equity drive process, you may see these plant builders say, ‘Well, this is too much trouble. I'll just get the money from Wall Street.’

“So we must be careful with how we go about this. Whatever we do needs to fix a problem that actually exists — not a problem someone perceives.”

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