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Energy Bill Pushes Through Senate

There's a lot of renewable fuel 'good news' in this bill, but Bush administration has trouble with some fuel economy standards.

The Senate is pushing ahead with an energy bill that has garnered the support of commodity groups, but may have provisions that don't make the Bush administration happy. Specifically, the bill would call for moving to 36 billion gallons of ethanol use by 2022 including a push for the use of cellulose-based renewable fuels.

However, the Bush administration has problems with provisions in the measure that would require automakers to hit specific fuel-efficiency targets. It's a provision U.S. automakers say the targets may not be achievable.

For agriculture, the big push for ethanol is good news. "This legislation blazes a trail toward more robust, more diverse, and more affordable domestic energy supplies," says Ken McCauley, president, National Corn Growers Association. He notes that corn growers are already confident they can produce 15 billion bushels of corn by 2015, which would support 15 billion gallons of corn-based ethanol without impacting corn markets.

Bob Dineen, president, Renewable Fuels Association, sees the bill's push for cellulosic ethanol as an important move. "This bill is to cellulosic ethanol what the 2005 energy bill was to grain ethanol," he notes in a press statement. "Whether it's the fiber in the kernel of corn, the corn stalks left on the field, switchgrass, wood chips or any other agricultural by products, we will need ethanol production from all these sources."

The legislation contains a few specific ag friendly provisions, including:

  • New Renewable Fuels Standard, requiring use of 36 billion gallons of renewable fuels annually by 2022.
  • Loan guarantees for renewable fuel facilities, including cellulosic ethanol production.
  • Grants to establish renewable fuel corridors.
  • An examination of the impacts of moving beyond 10% ethanol blends.
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