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Senate bill includes renewable fuels standard

A federal fuels standard is not yet renewed, but the old debate continues in Congress. Corn growers and other ethanol proponents are encouraged by adoption in the Senate of a renewable fuel standards (RFS) amendment to this year's energy package.

With positions again aligned along familiar rural and urban interests, Senate adoption of the amendment followed debates that had killed earlier RFS proposals. Congress was unable to pass an energy bill in 2002 because of contentions over RFS. Senate Majority Leader Bill Frist, R-Tenn., and Minority Leader Tom Daschle, D-S.D. sponsored the measure.

Proposals earlier this session that were struck down by solid margins included various state exemptions, waivers and liability treatment of ethanol. The Frist-Daschle amendment, however, passed by a convincing 67-29 vote.

Senators were expected to approve the energy bill before the July 4 recess, which would give conferees opportunity to consider the bill throughout July and August. The House passed an energy bill in April.

The Bush administration, which is committed to any measure that might make the United States less dependent on foreign fuel sources, continues to push for RFS. In a recent statement, USDA Secretary Ann Veneman praised the congressional action.

“I applaud the U. S. Senate for passing an amendment to establish a national renewable fuels standard designed to achieve average annual use of at least 5 billion gallons by the year 2012,” she said.

The secretary also cited advantages for U.S. agriculture.

“This amendment is positive news for America's farmers and rural residents,” she said. “By raising the demand for farm products, this proposal would boost prices of corn and other crops, raise income for farmers and create more rural processing businesses.”

In turn, she said, the amendment would create or maintain an estimated 13,000 rural jobs with 23 percent of them arising in farming, 21 percent in food processing, and 56 percent in the nonfood sectors.

Ethanol, which would replace petroleum-based MTBE as a required fuel additive, is processed from grain feeds, primarily corn and sorghum.

Veneman said new technology is “increasing the demand for agricultural products by discovering alternative uses that not only increase returns to producers and create jobs in rural areas but also provide consumers with products that are better for the environment.”

She projected ethanol use would more than double over the next decade if the amendment becomes law. That, she says would be a “dramatic increase in a domestically produced, renewable fuel that reduces carbon monoxide and toxic air emissions.”

“This administration is committed to the kind of programs that support agriculture as an energy solution.”

“We look forward to this amendment becoming part of a final bill that the president can sign into law so that American farmers, ranchers and consumers can benefit from cleaner air and stronger rural communities.”

The National Corn Growers Association, a longtime proponent of RFS and expanded ethanol use, called the adoption of the Frist-Daschle amendment in the Senate a major victory for the renewable fuels industry.

“We fought a tough battle during RFS Senate deliberations,” said NCGA President Fred Yoder. “But we remained steadfast and continued toward our pursuit of including the amendment in the Senate energy bill.”

Provisions of the Senate RFS include:

  • Reaching a 5 billion gallon RFS requirement by 2012.

  • Eliminating the federal reformulated (RFG) oxygen requirement.

  • Phasing down the nation's use of MTBE over four years.

  • Enhancing air quality gains of the RFG program with strong anti-backsliding provisions.

  • Extending the small-refiner exemption from five to seven years.

  • Allowing gasoline marketers to commingle ethanol and non-ethanol blended fuels at the service station under certain circumstances.

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