There were a number of interesting, knowledgeable speakers addressing a number of hot topics on the program at the 2011 Iowa Renewable Fuels Association summit, held January 25 in Des Moines. One of those presenters was Bob Dinneen, and he came out swinging against the oil industry in his talk to the 700 people gathered at the conference.
Dinneen is the chief executive officer of the national Renewable Fuels Association (RFA) based in Washington, D.C. He is RFA's chief lobbyist and as a student of U.S. Energy policy, he has been in that position a long time.
In his speech, Dinneen pointed out many facts about renewable fuels that, he says, many of the opponents of biofuels get wrong. He notes that Iowa has a unique opportunity to tell the story of renewable fuels, given its place in the selection process for the next U.S. President. Iowa is the leading ethanol producing state and is big in biodiesel, too, and Iowa is the state that hosts the first in the nation caucuses which begin the process of winnowing the field of candidates for President of the United States.
Ethanol is facing renewed attacks over "food vs. fuel" issue
Dinneen warned the biofuel producers that they face renewed attacks on ethanol over the food vs. fuel issue, environmental concerns and tax subsidies. "The renewal of tax credits for biofuels in the lame-duck session of Congress late in 2010 only sets us up for an even bigger debate over the future of biofuels this year," he says. Congress extended the 46-cent-per-gallon federal tax credit for ethanol for only one year and reinstated the $1 per gallon tax credit for biodiesel for only one year. Both of these federal tax incentives expire at the end of 2011.
"When the news media report on the talking points of our opponents and say ethanol is driving up food prices, you should remind them that energy costs are the single largest factor in the price of food. And that ethanol is the only weapon we have today to battle against skyrocketing oil prices," says Dinneen.
"If the critics of ethanol try to tell you that growing corn in Iowa to make ethanol is somehow causing deforestation in South America, tell them to look at the data. They'll see that the grain used in ethanol production around the world only counts for less than 2% of worldwide acreage for grain. Deforestation has actually been falling as ethanol production has been increasing around the world."
The facts on ethanol's environmental and economic impacts
Dinneen says many opponents of renewable fuels point out the environmental impact around the world. He says there's an answer to that. "Take a look at the environmental consequences of tar sands and deep water drilling and hydraulic fracting over the next 12 months. You and I will have a tremendous opportunity to educate the people seeking the highest office in the land, and the media people who follow them. Don't be cowed by the cynicism of those who have been hoodwinked by the oft-repeated myths of our opponents."
Dinneen says an interesting fact is Iowa is the third largest producer of ethanol in the world -- behind only Brazil and the United States. Economically, he says, renewable fuels have been good for the economy, especially in Iowa.
"Show the presidential candidates and the media how your industry contributes about $12 billion to Iowa's economy and provides almost $600 million in state and local revenues - -how it can pay for police and fire protection and public schools. Show how, in a study by the Iowa RFA detailed last year, the production of renewable fuels contributes to the resilience of rural economies, providing reliable markets for farmers, good paying jobs for workers, customers for small businesses and new hope for communities in the midst of a recession."
2011 may be determining year for future of renewable fuels
The year 2011 is going to be very important for the future of biofuels, says Dinneen. "Those of you in the biofuels industry have great achievements to show, and great stories to tell and they demonstrate what a strong and growing global fuels industry can mean for our entire country, not only the Corn Belt, but communities from coast to coast and border to border."
Dinneen says the new Congress in Washington, D.C. will be the deciding factor in the future of ethanol and renewable fuels. "There are 106 new members of the U.S. House of Representatives, as a result of the last election," he points out. "That's one in four members who have had little to no exposure to the ethanol debate. Other than they have probably read the dishonest and distorted editorializing of the Wall Street Journal. We need to make sure these new members of Congress are hearing your story as biofuel producers in Iowa, your success and your vision for a more sustainable energy future."
Infrastructure of the biofuel industries must be expanded
Dinneen says 2011 may well be a decisive year for the future of renewable fuels in this country. "The opposition to biofuels is well organized, highly motivated and well-funded. We in the renewable fuels industry must be unified and disciplined in our message. We can't legislate with wishes and bumper sticker slogans. We need to recognize the need to reform the existing tax incentives and to reduce the cost, and encourage innovation and reflect market conditions. But we should not be bullied into abandoning a structure that has worked quite well."
Expanding the infrastructure by adding blender pumps and tanks at gas stations is very important for the future of the renewable fuels industry. He says, "We need blender pumps at fuel stations across our nation to enable widespread use of E15 and other midlevel blends and E85. The existing infrastructure tax credit from the federal government is unnecessarily restrictive; it needs to be expanded if we are to build upon the 2,300 blender pumps that exist nationwide today."
Good answers to critics who are blasting ethanol incentives
Dinneen points out rather strongly the fact that biofuels aren't the only fuels which are receiving subsidies from Congress. He asks: "Why, for example, must U.S. taxpayers continue to subsidize petroleum fuels that have enjoyed a monopoly in markets for 100 years? Why should we in the biofuels industry have to defend the investments made in renewable fuels every year while subsidies for the petroleum industry remain embedded in the federal tax code permanently?
He adds, "Why should taxpayers subsidize the foreign investments of oil companies that simply rob Americans of jobs and stifle investment here at home? Why should taxpayers foot the bill for restoring the ecological damage and the economic impact of catastrophic oil spills? And why must the best and brightest young people of Iowa and across our nation serving in the military be asked to risk their lives to protect the free flow of oil in parts of the world that would just as soon have us leave?"
What grounds does petroleum industry have to bash biofuels?
Dinneen says he has to wonder how the oil industry is able to argue against the biofuels industry? "What oil company lobbyist could make a compelling case for continuing the foreign investment tax credits the oil companies receive? Or their accelerated depreciation allowance? That simply furthers our U.S. dependence on imported oil. The petroleum industry has benefited from more than 100 years of incentives, subsidies and preferences that are now so embedded in the federal tax code that they're almost impossible to find. Estimates are oil companies are the recipients of up to $280 billion annually. And that's not including the U.S. Defense Department budget committed to protecting the shipping lanes in the Persian Gulf so foreign oil can be shipped to the United States and abroad."
"I'm sure we'll be talking about this in the near future, especially as we are this year moving into another election cycle. You'll be hearing quite a bit about ethanol and biodiesel and the pros and cons," says Dinneen. "And if you are from Iowa and if you realize how important the production of ethanol and biodiesel are to your state and your nation, you need to help fight for these clean burning, environmentally-friendly renewable energy sources by speaking up for them."