[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
THE BENEFITS OF TAX INCENTIVES FOR PRODUCERS OF RENEWABLE FUELS AND ITS
IMPACT ON SMALL BUSINESSES AND FARMERS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON RURAL ENTERPRISES, AGRICULTURE, & TECHNOLOGY
of the
COMMITTEE ON SMALL BUSINESS
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
__________
WASHINGTON, DC, MAY 6, 2004
__________
Serial No. 108-63
__________
Printed for the use of the Committee on Small Business
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
______
U.S. GOVERNMENT PRINTING OFFICE
94-135 WASHINGTON : DC
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800
Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001
COMMITTEE ON SMALL BUSINESS
DONALD A. MANZULLO, Illinois, Chairman
ROSCOE BARTLETT, Maryland, Vice NYDIA VELAZQUEZ, New York
Chairman JUANITA MILLENDER-McDONALD,
SUE KELLY, New York California
STEVE CHABOT, Ohio TOM UDALL, New Mexico
PATRICK J. TOOMEY, Pennsylvania FRANK BALLANCE, North Carolina
JIM DeMINT, South Carolina ENI FALEOMAVAEGA, American Samoa
SAM GRAVES, Missouri DONNA CHRISTENSEN, Virgin Islands
EDWARD SCHROCK, Virginia DANNY DAVIS, Illinois
TODD AKIN, Missouri GRACE NAPOLITANO, California
SHELLEY MOORE CAPITO, West Virginia ANIBAL ACEVEDO-VILA, Puerto Rico
BILL SHUSTER, Pennsylvania ED CASE, Hawaii
MARILYN MUSGRAVE, Colorado MADELEINE BORDALLO, Guam
TRENT FRANKS, Arizona DENISE MAJETTE, Georgia
JIM GERLACH, Pennsylvania JIM MARSHALL, Georgia
JEB BRADLEY, New Hampshire MICHAEL MICHAUD, Maine
BOB BEAUPREZ, Colorado LINDA SANCHEZ, California
CHRIS CHOCOLA, Indiana BRAD MILLER, North Carolina
STEVE KING, Iowa [VACANCY]
THADDEUS McCOTTER, Michigan
J. Matthew Szymanski, Chief of Staff
Phil Eskeland, Policy Director
Michael Day, Minority Staff Director
SUBCOMMITTEE ON RURAL ENTERPRISES, AGRICULTURE AND TECHNOLOGY
SAM GRAVES, Missouri, Chairman FRANK BALLANCE, North Carolina
BILL SHUSTER, Pennsylvania DONNA CHRISTENSEN, Virgin Islands
SUE KELLY, New York ED CASE, Hawaii
SHELLEY MOORE CAPITO, West Virginia MICHAEL MICHAUD, Maine
MARILYN MUSGRAVE, Colorado BRAD MILLER, North Carolina
PATRICK TOOMEY, Pennsylvania
Piper Largent, Professional Staff
(ii)
C O N T E N T S
----------
Witnesses
Page
Hulshof, Hon. Kenny, U.S. Representative (MO-9), U.S. House of
Representatives................................................ 4
Hurst, Mr. Brooks, Missouri Soybean Association.................. 6
Dineen, Mr. Bob, President, Renewable Fuels Association.......... 8
Adams, Mr. Duane, National Corn Growers Association.............. 10
Hurst, Mr. Charlie, Golden Triangle Energy, L.L.C................ 12
Lampert, Mr. Phillip, Executive Director, National Ethanol
Vehicle Coalition.............................................. 13
Werner, Ms. Carol, Executive Director, Environmental and Energy
Study Institute................................................ 16
Jobe, Mr. Joe, Executive Director, The National Biodiesel Board.. 17
Appendix
Opening statements:
Graves, Hon. Sam............................................. 29
Prepared statements:
Hulshof, Hon. Kenny, U.S. Representative (MO-9), U.S. House
of Representatives......................................... 31
Hurst, Mr. Brooks, Missouri Soybean Association.............. 33
Dineen, Mr. Bob, President, Renewable Fuels Association...... 36
Adams, Mr. Duane, National Corn Growers Association.......... 45
Hurst, Mr. Charlie, Golden Triangle Energy, L.L.C............ 48
Lampert, Mr. Phillip, Executive Director, National Ethanol
Vehicle Coalition.......................................... 50
Werner, Ms. Carol, Executive Director, Environmental and
Energy Study Institute..................................... 54
Jobe, Mr. Joe, Executive Director, The National Biodiesel
Board...................................................... 62
(iii)
THE BENEFITS OF TAX INCENTIVES FOR PRODUCERS OF RENEWABLE FUELS AND ITS
IMPACT ON SMALL BUSINESSES AND FARMERS
----------
THURSDAY, MAY 6, 2004
House of Representatives,
Subcommittee on Rural Enterprise, Agriculture and
Technology
Committee on Small Business
Washington, D.C.
The Committee met, pursuant to call, at 10:02 a.m. in Room
311, Cannon House Office Building, Hon. Sam Graves presiding.
Present: Chairman Graves and Representative Miller.
Mr. Graves. Good morning. This is the Small Business
Subcommittee on Rural Enterprise, Agriculture and Technology. I
appreciate everybody coming in today. This is a newly
refurbished hearing room. We are real proud of it. It is very
nice, it is a lot nicer than our old hearing room over at
Rayburn. We are real pleased with it and this is the first time
we have gotten to use it this year.
Our purpose today is to explore the value of renewable
fuels and the role they play in the comprehensive energy policy
in our economy and in our national security. Far too often,
misconceptions regarding renewable fuels become embedded in the
heads of Washington policy makers. Questions such as our
renewable fuels and effective fuel source, are they affordable?
Most of us are aware of the successful track record of
renewable fuels, but it is my hope that today's panel can help
to further educate us on the effectiveness of renewable fuels
and clarify any misconceptions that are out there.
The focus of today's hearing is the many benefits of
renewable fuel's use, more specifically, I want to highlight
the positive impact on our economy and America's farmers. I
want to show why our country needs to maximize our domestic
renewable resources to provide an added market for our farmers
to drive down and stabilize the price of fuel, reduce
dependence on foreign sources of energy and increase our
important reserves.
I have asked today's panel to discuss how renewable fuels
benefit our economy and how federal policies can further
develop renewable fuel use. Also, advancing renewable fuel's
use is essential to lessen our reliance on foreign fuel. That
is why we need to include them in an overall national energy
policy. According to the Department of Energy, domestic supply
of petroleum peaked at 11.7 million barrels per day in 1970 and
imports stood at 3.2 million barrels. As domestic supply
declined, consumption grew. And in 1988, for the first time
ever, bed imports surpassed domestic supply. In fact, in 2002,
domestic supply was a little over nine million barrels per day
and net imports were over 10 million barrels per day.
Over reliance on imported fuel makes our economy and
national security vulnerable to the winds of foreign
governments, such as which are hostile to U.S. interests.
Recent increases in the cost of gasoline as a result of
tensions in the Middle East and elsewhere fully illustrate this
point. I believe that the United States should promote the use
of alternate, domestically produced fuel such as biodiesel and
ethanol. Fortunately, farmers in Missouri and across the nation
have expanded the industry at a record pace. Corn and soybeans
are used to produce ethanol and biodiesel--fuels good for the
environment and good for our economy.
Each day, more than five million gallons of ethanol are
blended into 65 million gallons of gasoline, adding critical
volume to the tight gasoline market and reducing pressure on
price. Since I have been in Congress, I have supported
legislation that promotes ethanol and biodiesel and I will
continue to fight for these fuels, which are included in a
national energy policy.
[Chairman Graves' statement may be found in the appendix.]
Again, I want to thank everybody for coming out today and I
do want to recognize Mr. Miller who is stepping in today for
Frank Ballance, the ranking member and I appreciate him being
here. Do you have an opening statement?
Mr. Miller. Thank you, a fairly brief one. I am pleased to
be here today to substitute for my friend, Frank Ballance, who
has an adjoining district of mine and with whom I served for
six years in the state senate before we both became members of
Congress last year.
Today an important issue for our country is access to a
reliable, affordable energy supply. The United States is a
large importer of energy and is sensitive to price increases
and to shortages. In an effort to insure our nation's energy
security, we have made significant investment in domestic
renewable energy sources. Small companies have to play a role
in those efforts.
These renewable sources include fuels like ethanol and
biodiesel. Both ethanol and biodiesel offer our small farmers a
way to produce value added crops. Such sources also assure our
energy independence, help to create jobs and are
environmentally friendly.
Ethanol is an alcohol produced primarily from grain. The
production facilities for ethanol provide a much needed
stimulus to many rural communities. The economic demand or
impact of demand for ethanol adds up to approximately 4.5
billion to foreign revenue annually and it boosts total
employment by approximately 200,000 jobs. I think many
Democrats with national ambitions realize that many of those
jobs are in the state of Iowa.
Biodiesel is another renewable fuel, but its market life is
behind that of ethanol. It does offer several health and
environmental benefits related to relative compared to
petroleum based diesel fuels. Increased substitution of
biodiesel for petroleum based diesel fuel may offer broader
public access to cleaner water and air.
As a result of these positive consequences, there are a
variety of government programs and tax incentives that deal
with renewable fuel production. These include tax credits,
requirements, subsidies and incentives. Some of these programs
have a specific emphasis on small business producers. Others
are targeted to those entering the marketplace.
There has been much congressional interest in renewable
fuels. Several of the issues on which Congress is focused are
addressed in H.R. 6, the Comprehensive Energy Bill. The energy
bill contains proposals such as establishing a renewable fuel
standard but the outcome of this legislation is still unclear.
An array of other congressional legislative issues are also
pending that deal with renewable fuels. That is because it has
been proven that renewable fuel production helps local
agriculture based communities to grow their economies, create
jobs and increase tax revenues for states.
There are also federal programs, mainly within the U.S.
Department of Agriculture, that focus on getting small
businesses more involved in the production of renewable fuels,
from loan programs and rural business opportunity grants to
technical assistance. There is support for small business to
play a larger role in the domestic production of renewable
fuels.
Unfortunately, the Bush Administration has proposed cuts to
renewable energy programs in its budget this year. Under the
Farm Bill, Congress provided $23 million a year in funds to
provide grants and loans to small business for the development
of renewable energy projects. But the administration proposal
would cut that program by $12 million.
There are more programs that focus on small business and
the production of renewable energy sources that also saw
cutbacks in the latest administrative proposed budget. If we
want to increase small business participation in the production
of renewable energy sources, then we must guarantee they have
the right tools and programs at their fingertips. It is
critical for our country to have a comprehensive energy policy
that not only includes supporting renewable fuels, but also
includes small business in the process. That way, we can insure
greater energy stability, additional jobs and increased
economic growth in our rural communities across the country.
I want to thank all of the witnesses for appearing today
and I look forward to their testimony. Thank you, Mr. Chairman.
Mr. Graves. Thank you, Brad. All of the statements of the
witnesses are going to be placed in the record in their
entirety and I first want to welcome Representative Hulshof,
who is going to be our first panel. Representative Hulshof has
been a leader, an outstanding leader in ethanol and biodiesel
legislation, particularly those areas as it deals with the tax
consequences and Ways and Means Committee. And I appreciate you
being here to testify today and I will open the floor up to
you.
STATEMENT OF THE HONORABLE KENNY C. HULSHOF (MO-9), U.S. HOUSE
OF REPRESENTATIVES
Mr. Hulshof. Thank you, Mr. Chairman. Good morning, Mr.
Miller. Appreciate the invitation and applaud you for having
this forum to discuss the broad based benefits of renewable
fuels. Perhaps if we transported this hearing across to the
other side of the Capitol, we might be better served, but I
appreciate the chance to be here.
I am actually here as a colleague, but I guess in the
interest of full disclosure, also as an active farmer. We have
375 acres of corn and probably about 350 acres of soybeans that
we expect to plant this year. So Mr. Miller, I appreciate your
comments as it affects value added agriculture.
I am going to submit my written statement for the record
and then just make a couple of points in the few moments that I
have. Mr. Chairman, you mentioned the rising prices of gasoline
right now. One need look no further than the gas pump to see
the need, the necessity to strengthen our commitment to
renewable fuels. I think back to the time when I got my drivers
license when I turned 16. We imported one out of three barrels
of oil from foreign lands.
Mr. Chairman, when your daughter turns 16, and I see that
look of trepidation in your face just mentioning that fact, but
knowing Megan as I do, when she turns 16, about two out of
three barrels of oil will be imported. And when my youngest
daughter who is one gets to that magic age of 16, if nothing
changes, roughly three barrels out of four will come from,
again, some foreign land.
And so obviously, our nation cannot afford to be
increasingly dependent upon these foreign sources of fuel. Mr.
Chairman, you talked about, suggested the economic benefits.
Let me give you just a couple of facts and figures from an
ongoing ethanol plant. In fact, a northeast Missouri grain
ethanol plant in Macon, Missouri. Mr. Miller, it is a small
town in the middle of the state in my congressional district.
It was the first ethanol plant developed in the state of
Missouri. According to Dr. Donald Van Dyne, who is a retired
research associate professor from the University of Missouri,
here is how the northeast Missouri grain annually bolsters the
local economy. First of all, it processes 16 million bushels of
corn from right within that area, circle around Macon,
Missouri, 16 million bushels of corn go through the plant,
producing about 42 million gallons of ethanol at that single
plant. As far as the number of jobs, obviously there are jobs
that are directly impacted or created by the plant itself. But
when you look at the indirect jobs, roughly 1,779 jobs, almost
1,800 jobs created in this one plant that are indirectly
related, which creates about $169 million in economic output.
You know, all of us are supporters, for instance of the
USDA rural development grants and the discussion about what
level of funding is appropriate. This is a way to help bolster
rural America. And I know, Mr. Chairman, in your district, in
Craig, Missouri, that probably similar numbers from the Golden
Triangle Ethanol Cooperative, similar benefits to the
surrounding community.
Each of you have said that the federal government has a
role as far as maintaining our commitment to renewable fuels. I
absolutely agree that the Energy Policy Act that was approved
by the House keeps that commitment. We hope, of course, that
our counterparts again on the other side of the Capitol would
see fit to maybe put the politics aside and allow this
comprehensive energy plan to be considered on the floor of the
Senate for an up or down vote.
Enactment of the Renewable Fuel Standard, for instance, not
only does it strengthen the ethanol tax incentive, and it also
creates an incentive for biodiesel. You know, we have been
focusing on ethanol. Biodiesel is another promising renewable
fuel, produced primarily from soybeans that can be blended with
conventional diesel fuel, burned in diesel engines, and again,
an economic benefit to the community, but also environmentally
friendly. The use of biodiesel has grown in the market. A
couple of years ago, 1999, about 500,000 gallons of biodiesel
were sold. Last year, biodiesel sales topped 25 million
gallons.
And so this increased acceptance of biodiesel in the
marketplace is a positive signal. That is why I think this
Renewable Fuel Standard is so important.
Mr. Chairman, at the outset, you talked about some of the
misconceptions about renewable fuels and that is why I again
applaud you for having this hearing, because I think it is
incumbent upon us to help dispel some of the myths. You do not
have to have some special engine. Obviously, if you are burning
E85, that is, 85 percent ethanol, yes, you have to have
modifications. But a 10 percent ethanol blend or an 80-20, B20,
you do not have to have these modifications and yet you still
are able to reap the positive environmental benefits. We lessen
our dependence upon volatile regions of the world as far as the
importation of our fuel and obviously, then, for those of us
who have rural constituents, some really direct and indirect
positive economic benefits.
So, again, thank you for giving me the chance to say a few
words before your Subcommittee and would be happy to answer any
questions you might have.
[Congressman Hulshof's statement may be found in the
appendix.]
Mr. Graves. Thank you, Mr. Hulshof. The misconceptions are
extremely tough for me and it is very frustrating. We did, I
think it was in 1990 or 1991 on our farm, we did a study
through the Missouri Soy Bean Association with biodiesel and we
were running about a 50 percent to one-third blend through our
tractors with no changes whatsoever. And that was when
biodiesel was in its infancy. It was just really getting
started, there were a lot of criticisms about gelling aspects
and that sort of thing. But it works and both products are
great products. Do appreciate you being here.
I know you are pressed for time. I would invite you, if you
would like to come up and sit on the panel, I offer that to
you, but I know you are pressed for time and do want to move
on, but I appreciate you taking the time to testify.
Mr. Hulshof. Mr. Chairman, as tempting as it would be to
share the dais with you and Mr. Miller this morning in this
awesome hearing room, you are right, I have other pressing
matters. But I do appreciate you giving me the opportunity to
be on the record here today to talk about something, but I
think we are at a critical juncture again.
From a policy perspective, if we could make decisions in a
policy vacuum, without question I think all of our colleagues
would support the idea of renewable fuels. It is just sometimes
when we add that political component is when we get frustrated,
you and I get frustrated because we see good policy that is
being hampered from being implemented because of the politics.
So hopefully this hearing and others like it will help break
loose that political log jam so that we can do good things for
our country. Thank you.
Mr. Graves. Thank you. We will go ahead and seat the second
panel and we will get everybody situated.
[Pause.]
Mr. Graves. I want to thank everybody for being here today.
I appreciate you all taking time out of your busy schedules to
be with us. We will go ahead and get started. We try to limit
testimony to five minutes, but we do not keep a very rigid
policy on that. If anybody goes over their time limit, I do not
think Mr. Miller or I will have you thrown out or anything. So
do not worry so much about that. There will be a timer down
there that kind of gives you what the limit is, but again, do
not worry too much about it.
We are going to start off with Brooks Hurst on the far
left, who is here with the Missouri Soybean Association. I
appreciate you being here, Brooks, very much and I will go
ahead and turn the floor over to you.
STATEMENT OF BROOKS HURST, MISSOURI SOYBEAN ASSOCIATION
Mr. Brooks Hurst. Thank you, Mr. Chairman. Mr. Miller, good
morning. I would like to first of all thank you, Mr. Chairman
and the members of the Committee for allowing me the
opportunity to testify today on behalf of the Missouri Soybean
Association, which represents about 28,000 Missouri soybean
farmers. I am a farmer from Congressman Graves district. We
have been blessed in Missouri with a progressive congressional
delegation. As the chairman mentioned a minute ago, he has
burned biodiesel on his own farm and Congressman Hulshof who
testified earlier is also a very staunch supporter of
biodiesel. In fact, the original legislation that I am here to
testify about today on the tax incentive, excise tax abatement
for biodiesel was originally drafted by Congressman Hulshof.
And it is one cent per percent excise tax abatement, up to a 20
percent blend. And it is in several pieces of legislation and
it is probably the single most important legislation that could
be passed for soybean farmers. The studies have suggested that
if this legislation and the excise tax abatement passes, there
would be a million gallon biodiesel market by the year 2012.
This market, the Food and Agriculture Policy Research
Institute has done a study that suggests an 80 cent per bushel
increase in the price of soybeans, which would mean $148
million in additional income to Missouri soybean farmers. And I
do not need to explain how important in the last couple of
years that would be to Missouri soybean farmers. The farm
economy has not been as robust as we would like. That would be
a crucial addition to our rural economy and all the rural
development implications that goes with it.
My father is also on the panel to testify later for
ethanol. We are both members of the Golden Triangle Ethanol
plan and it has done an amazing amount to increase our rural
development.
I am also sitting on a board of directors for Mid America
Biofuels, which is a biodiesel plant and we are in the start up
phases. And we have had feasibility analysis done on different
size plants. And right now, biodiesel is a boutique fuel. It
has a lot of uses in complying with the EPACT legislation in
large cities and the environmental aspects of it, which I will
talk about a little later, are very beneficial. So right now it
is kind of a boutique fuel and a five million gallon plant per
year is the largest feasible plant that we can build.
The minute that we get the excise tax passed, a five
million gallon plant is no longer efficient. So we are sitting
on the sidelines, because if an excise tax abatement is passed,
that will, you know, as I mentioned earlier, immediately
increase the demand for biodiesel. So it is very important and
we have been waiting for about three years to decide which way
to go on it, how to build the plant. I would really urge the
passage of the excise tax abatement, because a 15 million
gallon plant would do a lot more for the economic development
of rural Missouri.
I talked a little bit about the environmental advantages of
biodiesel. I will talk some more about that. There are no
sulfur emissions in biodiesel and the presidential directive
that reduced the sulfur content in petroleum diesel from 200
parts per million to 15 parts per million, sulfur adds a lot of
lubricity to biodiesel. So this is another deal that is not
environmentally friendly, but engine friendly. A one percent
biodiesel plant increases lubricity of diesel 65 percent. So I
see an opportunity to reduce engine wear by a small blend of
diesel in the national fleet and adding lubricity to diesel.
Soy diesel also burns half the hydrocarbons which, when
added to the air, contribute to smog and acid rain. It also has
half the carbon monoxide of petroleum and half the particulate
matter and it has 75 to 80 percent less potential cancer
causing agents. And so you can see that not only is it a
renewable fuel that we grow right here on our own farms, but it
also is very good to the environment.
Another thing that is brought up in renewable fuels
discussions is the energy conversion required to produce
renewable fuels. And I am very proud to say that in a 1998 U.S.
Department of Energy and United States Department of
Agriculture Joint Study revealed that for every unit of fossil
energy required to produce biodiesel, 3.2 units of energy were
yielded, and that is in contrast with 1.2 units of fossil
resources needed to make just one unit of petroleum diesel.
This is due to the fact that soybeans do not use nitrogen in
the production of them. So we have really good energy
conversion numbers and we are proud of that.
And it has been mentioned before on the panel, Mr.
Chairman, you referenced in your opening statement and
Congressman Hulshof referenced it, too, the dependence on
foreign oil. I will not go over the numbers again, but, you
know, 20 million barrels a day of oil the United States is
using and over half of it now is imported. And by 2005, the
Department of Energy projects that 68 percent of all oil will
be imported.
Right now there is currently a 1.5 billion pound surplus of
vegetable oil in the U.S. I think that is a perfect opportunity
to use biodiesel to not only use up excess vegetable oils, but
also to replace some of the imported petroleum from foreign
countries. If we have a four percent use of renewable fuels by
the year 2016 in a U.S. consultant study, using Department of
Energy numbers, stated that four percent renewable fuels would
displace annually 302 million barrels of petroleum fuels that
we are currently importing. So you can see not only in national
security, but for rural economic development and the farm
economy, I think that renewable fuels are a very good
opportunity to help our nation. And with that, I would like to
thank you again for allowing me this opportunity to testify and
I appreciate your consideration of this matter.
[Mr. Hurst's statement may be found in the appendix.]
Mr. Graves. Next we will hear from Bob Dinneen. We are
going to move through all the panelists and then we will take
questions once each of you have finished. But, Bob, I
appreciate you being here today. Bob is the president of
Renewable Fuels Association and we look forward to hearing your
testimony.
STATEMENT OF BOB DINNEEN, RENEWABLE FUELS ASSOCIATION
Mr. Dinneen. Mr. Chairman, thank you very much and
Congressman Miller. I appreciate the opportunity to be here
this morning and I commend you for the leadership that you are
showing in holding this very timely hearing. Indeed, I can tell
you that the tax incentives that Congress has provided to
stimulate renewable fuels have been extremely successful and
have promoted rural economic development and small businesses
all across this country.
Indeed, Mr. Chairman, the U.S. ethanol industry today is
the fastest growing energy industry in the world. We produced
2.8 billion gallons of ethanol last year. That is 32 percent
more than we had the previous year and about double our
production from just four years ago.
Importantly, the fastest growing segment of the ethanol
industry are small businesses. Farmer owned cooperatives that
want to seize control over their own product. As a whole,
farmer owned ethanol facilities are now the single largest
ethanol producer in the country, providing critically important
value added economic stimulus to rural America.
Last Saturday, I attended the grand opening of the 76th
ethanol plant in operation today, just a little bit north of
Missouri in South Dakota, maybe a little bit east of North
Carolina, but we intend to have ethanol plants in North
Carolina as well.
Mr. Graves. That is west.
Mr. Dinneen. West, I am sorry. See, I got into politics
because I was never very good at geography, Congressman.
Anyway, that plant joins a fraternity of ethanol producers
across the country that this year alone will process more than
one billion bushels of corn into about 3.4 billion gallons of
high quality, high performance fuel ethanol. Ethanol is now
blended in 30 percent of the nation's fuel. It is replacing
MTBE in new markets all across the country, from New York to
California. And the growth that we are seeing in ethanol
markets has been phenomenal.
This growth is absolutely as a direct result of the tax
incentive program that Congress provided to stimulate the
production and use of renewable fuels and it has tremendous
benefits for the nation. Earlier, Congressman Hulshof cited the
economic benefits to a small rural community. We in the
industry have looked at what the economic benefits were across
the entire nation, from 3.5 billion gallons of ethanol. We
determined that the ethanol industry today is adding $15.3
billion to gross output. The ethanol industry today is adding
$3.9 billion to consumers' pocketbooks as a result of the jobs
that are created and the economic stimulus that is provided.
We are adding $1.25 billion in increased federal tax
revenue and another $800 million in local taxes. And at a time
when many industries across the country are outsourcing jobs,
the U.S. ethanol industry is insourcing jobs, this year alone
being responsible for 143,000 jobs across the country.
And all this is being accomplished at the same time that
the federal government is realizing about $2 billion in net
savings as a result of reduced farm program costs. But, Mr.
Chairman and Congressman, we can do far more. The country is
currently importing about 62 percent of its transportation
energy. Imports of crude oil and refined products are at their
highest levels ever. Tight gasoline supplies have driven
average consumer prices to record levels. We are in the midst
of an energy crisis and we need to act now. Congress should act
to pass the Comprehensive Energy legislation that you both
discussed in your opening statements and Congressman Hulshof
cited and that energy legislation ought to include a renewable
fuel standard, to send a signal to the world that our nation is
not going to continue on this path towards increasing
dependency on imports. That we will create a new pathway and a
new dynamic, where we are producing our own energy.
We also strongly support HR 3119, introduced by Congressman
Hulshof, the Volumetric Ethanol Excise Tax Credit and we urge
its expeditious approval in whatever piece of legislation we
can get that on. If VEETC solves a dilemma that the ethanol tax
incentive has created for states by no longer allowing states'
highway funding to be reduced because of their ethanol use, it
resolves that issue so that states are not penalized for their
ethanol use. It creates a great deal more flexibility for
refiners that utilize ethanol, such that they do not have to
use ethanol in specific volumes and importantly, as Phil
Lampert, I am sure, will talk about later, it provides a much
more economic access to the incentive than the current program
by allowing oil companies to take advantage of the tax credit
independent of whatever volume or specific blend level is used.
We also believe that Congress should finally act to correct
an oversight that occurred in 1990 when Congress created the
Small Ethanol Producer Tax Credit, but failed to allow that
credit to be claimed by farmer owned cooperatives. As I
indicated, the fastest growing segment of our industry is the
farmer owned cooperative, but the way that tax program was set
up, those very small businesses are not able to claim the
credit that was provided and intended to help them. That
legislation is passed several times. It has never reached the
President's desk. If we can get that on a piece of legislation
this year, I think it would be important.
Look, at a time when there are 135,000 in the Persian Gulf,
at least in part because of our dependence on energy from that
part of the world, at a time when consumer gasoline prices are
at their highest levels in history and the growing energy
crisis is slowing our economic recovery, at a time when EPA
says that more than half of the country is living in areas and
breathing polluted air, and at a time when farmers across the
country are looking for value added markets and are saying that
they can be energy producers as well as energy consumers,
Congress needs to act.
We need an energy bill. We need policies such as those I
have outlined to stimulate further expansion of domestic
renewable fuels such as ethanol and biodiesel. With your
continued leadership and the leadership of this Committee, I am
confident that that will occur. Thank you, Mr. Chairman,
Congressman Miller. I will answer any questions when that time
arises.
[Mr. Dinneen's statement may be found in the appendix.]
Mr. Graves. Thank you, Mr. Dinneen. We are now going to
hear from Duane Adams from Cosmos, Minnesota, I believe. And he
is representing the National Corn Growers Association and I
appreciate, Mr. Adams, you being here today and thank you for
your testimony.
STATEMENT OF DUANE ADAMS, NATIONAL CORN GROWERS ASSOCIATION
Mr. Adams. Thank you, Mr. Graves and Mr. Miller. I
certainly appreciate the opportunity to be among the first to
testify in this beautifully renovated room. It is really pretty
beautiful.
Okay, my brother and I raise corn and soybeans near Cosmos,
Minnesota, which is about 70 miles west of Minneapolis. We are
investors in a local ethanol co-op. I am the chairman of the
Ethanol Committee for the National Corn Growers Association. I
am here today to represent the NCGA, its 33,000 members and
thousands of corn growers across the country who participate in
corn check-off programs.
N.C.G.A. appreciates the opportunity to offer testimony
today on the benefits of ethanol production to rural America.
The strides made by the industry in the past few years are
nothing short of miraculous and it is a story that needs
repeated telling.
No other energy source has doubled its production in the
last three years. There was virtually no ethanol used in
California two years ago. The ethanol industry now supplies
eight percent of the gasoline supply in the state--a total of
900 million gallons per year. And we can conclusively prove
that ethanol has kept the price of gas in California from
rising faster than it has. Even the MTBE industry has publicly
agreed. The contribution of this domestically produced
renewable fuel is being felt at the pump across the country.
But the true success of ethanol is best measured in the
benefits to rural America. Ethanol plants bring jobs, good
jobs, to small rural communities that struggle to keep young
people. A 40 million gallon plant will provide more than 40
full time permanent jobs. In small town USA, those jobs are
vital. Ethanol plants help keep schools and hospitals open and
businesses profitable. And ethanol plants provide hope--a
commodity that has not been in surplus for many small rural
communities.
Ethanol production is increasingly in the hands of farmer
owned coops. ADM is not the big player in the industry. I am--
and my brother and our neighbors and tens of thousands of
farmers across the Corn Belt. We have become marketers of
energy and not just sellers of corn. We are getting more of our
income from a value added source and less from farm programs.
Ethanol can claim to be the primary reason that the federal
farm program will save $2 billion this fiscal year. We had a
near record corn crop last year and we have high prices this
year. That would not have happened if we were not using more
than one billion, 300 million bushels of corn for the
production of ethanol. It is the third largest use of corn
behind livestock feed and exports and it is the one with true
growth potential.
We did not get to this point by accident. Federal policy
supporting the ethanol industry has made this possible. The
excise tax credit, the small producer tax credit and other
incentives have helped us get the capital to build plants.
Federal policy regarding clean air has created a strong demand
for ethanol as states ban MTBE and turn to affordable supplies
of ethanol in reformulated gasoline. Strong support for the
oxygenate standard by the Bush Administration has given the
industry the signal to invest and to produce. We have heard the
challenge and we have met it.
N.C.G.A. policy strongly supports current renewable
programs. We have joined with others in the ethanol industry to
seek ways to advance common sense solutions to problems we have
had. We worked hard to reach a historic agreement with the
petroleum industry that calls for flexibility for gasoline
blenders and establishes a renewable fuels standard that
provides stability for the renewable fuels industry. We joined
with the highway construction industry and state governors to
fix a problem created by the current excise tax credit. The
Volumetric Ethanol Tax Credit legislation is a bipartisan
solution that helps states that want to use ethanol and need to
invest in highway infrastructure. It solved some sticky
political problems for both industries and pointed a way for
Congress to pass policy that is good for America and has broad
base support.
The programs that benefit ethanol and other renewable fuels
were enacted by previous Congresses. We are glad they did and
we recognize the leadership and statesmanship that was required
to obtain enactment of those policies. This Congress and its
predecessor have debated and talked and talked and debated over
energy policy for more than three years. Nothing has happened.
In that time our nation has become even more dangerously
dependent on foreign energy.
Our farmers have spent countless hours on Capitol Hill and
in town meetings and congressional listening sessions asking
members of Congress why we cannot pass an energy bill. If we
ask a member of the House, he or she will blame the Senate. If
we question a Senator, the House is blamed. The Republicans
blame the Democrats and the Democrats blame the Republicans.
Tom Daschle and Tom Delay seem to be two handy targets.
Everyone else is to blame and no one takes responsibility. Let
me bring you one very clear message from farmers--quit blaming
the other guy and do your work. We cannot raise corn without
anhydrous ammonia and we cannot make anhydrous with natural gas
at current prices and supplies. We cannot run ethanol plants
without energy. Our economy cannot get out of its slump with
gasoline prices increasing every week.
I have my crop in the ground. I made my investment in the
ethanol plant. I write my Congressman and Senators. I vote. I
encourage my neighbors, friends and fellow farmers to do the
same. And I will continue, but let me end with this note. We
farmers are looking at you folks to quit bickering and do the
nation's business. Our nation needs an energy policy and we
expect you to deliver. Thank you for your time.
[Mr. Adams' statement may be found in the appendix.]
Mr. Graves. Thanks, Mr. Adams, I do appreciate that. Point
well taken. We are now going to hear from Charles Hurst, who is
with the Golden Triangle Energy Cooperative, the ethanol plant
in Craig, Missouri. I appreciate you being here, Mr. Hurst, and
look forward to your testimony.
STATEMENT OF CHARLIE HURST, GOLDEN TRIANGLE ENERGY, L.L.C.
Mr. Charles Hurst. Thank you, Mr. Chairman. My name is
Charlie Hurst, a fifth generation farmer from northwest
Missouri and secretary treasurer of Golden Triangle Energy
Cooperative in Craig, Missouri.
The small town in the Midwest is rapidly losing the best
and the brightest young people. They are completing their
schooling and then leaving for employment in the city.
A small ethanol plant, such as Golden Triangle Energy in
Craig, Missouri, who has a population of 309--this is really a
small town, provides decent jobs for these people and allows
them to stay and raise their families in a home environment.
Golden Triangle Energy hires approximately 30 people. The
starting wage for the inexperienced is $11 to $12 an hour, plus
excellent health and retirement benefits. The salaried
positions are from $30,000 up.
When you include the jobs of the people moving the corn
into the plant and moving the ethanol and feed products out of
the plant, it has a major financial impact on a very small
area.
The lifeblood of all small towns is their schools. IF the
school closes, the town has a very difficult time surviving.
The tax base that Golden Triangle has given to the schools and
the town of Craig infrastructure, such as roads, sewers and so
forth in the town, is a major contributor to the stability of
Craig, Missouri.
All of these area improvements would not be possible
without the ethanol plant in Craig. The ethanol plant has also
had a very positive effect on my family. With improved prices
and the reduction of transportation costs, we now have three
sons and their families farming with my wife and I. Last year,
the oldest grandson, the seventh generation to be farming in
Atchison County, and his wife, also joined the operation.
Another agriculture related business in the family,
greenhouses, has brought two granddaughters and their families
back to this same area.
The federal exemption of 5.2 cents per gallon of ethanol is
one of the best rural development programs funded by the
federal government. It has provided the basis for an expanding
ethanol industry in the central United States and has reduced
the need to import more expensive oil from the Mideast.
The ethanol industry now uses 10 percent or one billion
bushels of our corn crop. This raises the price of corn
nationally from 15 to 25 cents per bushel. Until the last few
months, the price of corn to the farmer was below the
guaranteed price in the farm program. The farmer was paid the
difference in LDPs. Without ethanol, these payments would have
averaged 20 cents per bushel more on an entire corn crop of 10
billion bushels.
This benefit alone would have offset the 5.2 cents per
gallon the federal government paid supporting ethanol. Not only
has the ethanol industry raised the price of corn nationally,
but locally, around the town of Craig, the price has risen
another 10 to 15 cents. This means that rather than shipping
the corn another 50 to 75 miles to a terminal, we are
delivering the corn locally, saving transportation costs.
The increased price of corn goes directly to the farmer's
bottom line. The income and social security taxes the farmer
pays is another huge offset to the 5.2 cent government subsidy.
There have been studies in the past that have cast doubt on the
energy efficiencies of producing ethanol. The latest studies by
USDA show that we are getting 34 percent more energy from a
bushel of corn than inputs in producing that bushel of corn.
These efficiencies will only improve in the future.
We are also converting corn to a more useable form of
energy. With the introduction of the hydrogen fuel cell,
ethanol will become even more desirable.
As we import more and more of our energy needs, as we are
more concerned with the quality of the air we breathe and as
the cost of all forms of energy are increasing, I believe we
must expand the use of ethanol as a clean burning, renewable
energy source. The 5.2 cent federal subsidy is needed by the
industry to be a viable, renewable energy source. It is not,
however, a direct drain on federal resources. As offsetting
savings in the federal farm programs, the jobs and taxes the
industry provides, and the savings in the balance of trade more
than offset this cost. Thank you very much, Mr. Chairman.
[Mr. Hurst's statement may be found in the appendix.]
Mr. Graves. Thank you, Mr. Hurst. We will now hear from
Phillip Lampert, who is the executive director of the National
Ethanol Vehicle Coalition. I appreciate you being here today
and look forward to your testimony.
STATEMENT OF PHILLIP J. LAMPERT, NATIONAL ETHANOL VEHICLE
COALITION
Mr. Lampert. Thank you so much, Chairman Graves and Mr.
Miller. Appreciate the opportunity to be here today. I am Phil
Lampert and serve as the executive director of the National
Ethanol Vehicle Coalition. NEVC is the nation's primary
advocate of the use of 85 percent ethanol as a form of
alternative transportation fuel. Our members include
automakers, state and national corn growers associations,
ethanol producers, equipment manufacturers and suppliers,
ethanol marketers, the Governors' Ethanol Coalition, farmer
cooperatives, chemical seed companies, petroleum marketers and
individuals.
Our focus in regard to the use of ethanol is very narrow in
that we concentrate our efforts and resources on advancing this
next generation of ethanol use.
As chairman and the members of the Committee know, motor
vehicles produced and sold in the United States have been able
to use a 10 percent blend of ethanol for many, many years.
Initially established to extend the availability of petroleum,
ethanol has transformed itself from the gasohol of the early
1970s to the oxygenate of choice in 2004.
In July of 1979, as then President Carter addressed the
nation, calling the battle to achieve energy independence the
moral equivalent of war, gasohol availability was limited to
Nebraska, Iowa and several other Midwest states. Today, as
previously mentioned, almost 900 million gallons of ethanol are
being used in California and hundreds of millions of gallons in
the East Coast and elsewhere across the nation. This ethanol is
added to our gasoline, typically in a blend of one part alcohol
to nine parts gasoline and is used to improve air quality, add
octane and reduce dependence on imported petroleum.
My colleagues who have preceded me this morning, two of
which are representing organizations that are members of the
National Ethanol Vehicle Coalition, have provided outstanding
summaries of the positive impact that biofuels have on our
nation's economy, balance of trade deficit and environment.
While the use of ethanol has expanded from approximately 300
million gallons in 1980 to the more than 3.3 billion gallons
expected to be produced this year, by and large, the vast
majority continues to be dependent on being blended with high
amounts of gasoline.
The Ethanol Vehicle Coalition strongly supports the
continued growth and development of the use of ethanol as an
oxygenate and renewable fuel and we have worked with our
colleagues here this morning and members of Congress to adopt
and promote the renewable fuel standard. However, sir, the
focus of the National Ethanol Vehicle Coalition and the balance
of my comments are directed to other uses of ethanol as a form
of alternative fuel.
Beginning in 1992 with the modest production of 272 E85
flexible fuel Luminas built by General Motors, we expect that
during the current model year, more than 1.5 million of such
vehicles will be produced and sold in the United States. By the
end of this model year, in August of 2004, we estimate that
approximately 4.5 million flexible fuel vehicles will be on the
nation's highways. These flexible fuel vehicles, as the
chairman knows, are capable of operating on any blend of
ethanol, from zero percent, 10 percent, up to 85 percent, or
where ethanol fuels are unfortunately not marketed, on pure
gasoline.
The electronic control module in these vehicles reads the
level of alcohol in the fuel and modifies the air fuel ratio.
There are no switches to flip, additional fueling tanks or
other controls needed. The technology is transparent to the
driver and most importantly, this capability is provided at no
extra cost to the consumer.
The 4.5 million flexible fuel vehicles on our highways
could, Mr. Chairman, if using E85, consume an additional 3.4
billion gallons of ethanol today. That is in addition to the
3.3 billion gallons that we assume to be used in 2004.
Unfortunately, using statistics provided by the Energy
Information Administration, we expect to actually consume about
30 million gallons in these vehicles, or slightly less than one
percent of the total potential demand that could be generated
by this technology.
Three primary factors in regard to this problem. Lack of
fueling infrastructure. Secondly, the difficulty that is
inherent with taking advantage of the current tax situation.
And finally, the lack of education and knowledge of many of the
drivers that they even have a flexible fuel vehicle.
Mr. Chairman, finally, with your indulgence, I would like
to briefly outline potential solutions to some of these
problems. First, as my colleagues preceding me have mentioned
this morning, passage of the Volumetric Ethanol Excise Tax
Credit is extremely important and would provide immediate
relief to the Highway Trust Fund and advance the use of E85.
Secondly, passage of a renewable fuel standard would also be
very supportive. Finally, sir, placing additional attention on
the federal fleet to provide leadership in the use of biodiesel
and E85 may be appropriate.
The government of the United States is the world's largest
single user of petroleum products and maintains the world's
largest fleet of vehicles. There have been previous attempts to
modify the behavior of government to advance alternative fuel
use, however, these have frequently come up short. As an
example, the Energy Policy Act of 1992 requires federal
agencies to purchase alternative fuel vehicles. Twelve years
after the adoption of this mandatory measure, many federal
agencies continue to fail to meet these purchase requirements.
While some progress has been made in meeting this standard,
EPACT completely fails to address the use of the alternative
fuels in these alternative fuel vehicles.
Executive Order 13149 issued by the Clinton Administration
and embraced by the current administration, requires federal
agencies to reduce petroleum consumption 20 percent from a 1999
baseline as of January 1, 2005. Unfortunately, there is little
effort being made to advance this presidential directive and it
is unlikely that any federal fleet will actually reduce
petroleum consumption, much less meet the 20 percent reduction
goal.
Clearly, national energy independence cannot be achieved
solely on the actions of the federal fleet. However, there is a
place and role of leadership that the federal government may
wish to more closely address in regard to the use of domestic
renewable transportation fuels. We appreciate and applaud all
of the efforts that you have made,Mr. Chairman. I have enjoyed
working with you from your days in the Missouri legislature to
today, and want to thank you for the opportunity to testify
today. Thank you.
[Mr. Lampert's statement may be found in the appendix.]
Mr. Graves. Thank you, Mr. Lampert. Next we are going to
hear from Carol Werner who is the executive director of the
Environmental and Energy Study Institute and I appreciate you
being here today and look forward to your testimony.
STATEMENT OF CAROL WERNER, ENVIRONMENTAL AND ENERGY STUDY
INSTITUTE
Ms. Werner. Thank you very much, Mr. Chairman and Mr.
Miller, for the opportunity to appear before you today. My
organization, the Environmental and Energy Study Institute, was
founded in 1984 by a bipartisan group of members of Congress
who were concerned about energy and environmental issues. As
part of our work, we hold about 20 to 25 congressional
briefings a year, looking at environmental, energy, science,
technology and policy issues that are coming before the
Congress.
We have three major areas of program work. Energy and
climate change, our Clean Bus/Sustainable Transportation
Program and our Agriculture and Renewable Energy Initiative. I
agree with so much of what has been said by my colleagues here
today, so I hesitate to repeat a lot of the things that have
already been said. But perhaps the most important thing for me
to talk about a little bit is our perspective in terms of why
our organization, EESI, feels so strongly about this issue.
Our organization believes strongly that a healthy economy
and a healthy environment go hand in hand. We very strongly
believe that farmers across the country can and must play an
important role in our country's energy future. We see
agriculture addressing three critical drivers that are
fundamental to our national concerns. Rural economic
development, national energy security through reduction of oil
use and oil imports and environmental protection, especially
reduction of greenhouse gas emissions that contribute to global
climate change.
Furthermore, we now have all seen countless reports on the
connection between power plant and vehicle emissions and public
health and the enormous increase in asthma cases among
children. Use of biofuels can address that, too. I think it is
remarkable, but how many times do we find the opportunity to
solve multiple problems with the kind of win-win solutions
provided by the production of renewable energy in the form of
electricity, biofuels in terms of ethanol and biodiesel and
biobased products that can be produced by America's own farms
and small businesses across the country.
We see enormous opportunities existing for developing rural
America's clean energy resources, including biofuels, bioenergy
in terms of the production of electricity, useable heat or
liquid fuels from biomass, wind, solar and improving energy
efficiency overall. Yet we see that there exists a tremendous
knowledge gap among policy makers. We have seen that throughout
the last couple of years with regard to many of the debates on
the Energy Bill with farmers and other key stakeholders,
including the environmental community about all of these
opportunities.
So I think that what I would like to do now is to just talk
a little bit about the suite of policies that we think is very
important. Many of them have been referred to already, because
in order to accomplish moving towards a more biobased economy
and really seeing agriculture being revitalized through the
development and use of our very abundant renewable resource
base, in order to accomplish that, we believe that there needs
to be a suite of policies, not just one particular policy will
take care of this. That means with regard to the tax incentives
that have been talked about here this morning, we support that
and believe that those are extremely important in helping send
the right signals to industry and, indeed, to begin to level
the playing field.
The kinds of renewable resources and biofuels that we are
talking about have many positive attributes that are not
reflected in the marketplace at this time. And therefore, tax
incentives at this time are absolutely critical. And therefore,
the VEETC proposal is also extremely important as we look at
the Highway Trust Fund.
The renewable fuel standard, another important incentive
that we view as a terribly important component of looking at
how policies need to create a supportive framework. There are
several important programs in the energy title of the Farm
Bill. It is very important that the 2002 Farm Bill for the
first time recognized the role of America's farms in helping
produce renewable energy that can address so many of our
problems.
At the same time, those programs which have been so
enthusiastically embraced by the ag community across the
country, whether it is in terms of looking at biofuels, at
wind, at anaerobic digesters, there is enormous enthusiasm as
people see the opportunities to really look for local economic
development and small businesses and being able to actually
stay on the farm in a viable way.
Those programs, however, Section 9006, the Renewable Energy
Program, as well as the Value Add Program, both were cut very,
very substantially by the administration's budget proposal. We
hope that Congress once again this year restore funding for
those.
At the same time, we think that it is also important for
there to be a renewable resource assessment that can help
communities across the country really know the size of the
renewable resource that they are sitting on. In terms of really
getting that developed, if you do not know the value of what
you have really got, it is hard to really encourage the full
fledged development of that.
And we would also like to mention that it is very important
for the federal government to lead by example, again, whether
it is through federal fleets, through purchase renewable
energy, that that also needs to occur. And that it is very
important that we look at this as an opportunity to develop
opportunities for biofuels and renewable energy production from
farms across the ag sector, whether it is the Midwest, the
Northeast, the Southeast, Northwest, across the country. We
feel that that is critical in terms of really building the
bridge, looking at all of the feed stocks that should be
involved, including waste materials that can make a huge
contribution and can also help bridge the very important rural/
urban divide that we see, that is acting as a barrier to really
moving all of these wonderful opportunities forward. Thank you.
[Ms. Werner's statement may be found in the appendix.]
Mr. Graves. Thank you, Ms. Werner. I appreciate your
testimony. We are now going to hear from Joe Jobe, who is the
executive director of the National Biodiesel Board. I
appreciate you being here today and look forward to your
testimony.
STATEMENT OF JOE JOBE, THE NATIONAL BIODIESEL BOARD
Mr. Jobe. Thank you, Chairman Graves, Congressman Miller. I
would like to again commend you for your leadership and
advocacy on this issue. I do serve as the executive director of
the National Biodiesel Board in Jefferson City, Missouri. NBB
is the national not for profit trade association which serves
as the central coordinating body for biodiesel research and
development in the United States.
It was founded in 1992 by soybean farmer groups who were
funding biodiesel research and since that time, NBB has
developed into a comprehensive industry association which
coordinates with a broad range of cooperators
Mr. Chairman, my distinguished panelists have made many
important points here today and I agree with those points. So I
would like to focus my comments on how biodiesel specifically
offers an immediate and long term solution as part of an
integrated, diversified energy portfolio.
Biodiesel is a diesel fuel substitute made from
agricultural products such as vegetable oils and animal fats,
including recycled cooking oils. Biodiesel is produced through
a process which separates the glycerin from the oil and the
resulting compound acts very chemically similar to diesel fuel
in a diesel engine.
It can be used in conventional diesel engines in pure form,
but it is most commonly blended, as you pointed out earlier, in
20 percent blends or B20 or two percent blends, also known as
B2, which is used as a renewable premium diesel additive. It is
one of the best tested alternative fuels in the country, with
more than 50 million successful road miles, countless marine
and off road hours. It has been tested in virtually every
diesel engine type and every diesel application, has similar
torque, horsepower and fuel economy to conventional diesel, but
burns significantly cleaner because of the oxygen content in
the fuel. It has premium fuel attributes.
U.S. soybean farmers have invested more than $40 million
through their Soybean Check Off Program and biodiesel growth
has either doubled or tripled each year for the last four years
in a row. While biodiesel can and is being used in today's
diesel engines, the future of diesel is about to shift very
dramatically. The EPA has ruled that beginning in 2006, diesel
fuel will undergo a 90 percent reduction of sulfur in diesel
fuel. What that will do, the refining process to desulfurize
the diesel fuel will also remove the lubricating
characteristics in diesel fuel and a diesel fuel injection
system relies on the fuel to keep the system properly
lubricated. It is very important in a diesel system.
Biodiesel is well positioned and well addressed to fit into
that future diesel platform because it already meets the 2007
sulfur standard and it is complimentary to ultra-low sulfur
diesel fuel because it has very excellent lubricity benefits.
As Mr. Hurst pointed out, just two percent biodiesel can
improve lubricity by as much as 65 percent.
During the EPA's rulemaking process, Stanadyne Automotive,
which is the largest fuel injection equipment manufacturer in
the United States, indicated that two percent biodiesel in the
entire diesel fuel pool, would be a superior solution to the
lubricity problem created by that ruling. The state of
Minnesota has already taken the leadership role in utilization
of biodiesel and compliance with the rule by enacting
legislation that will require that by next year, all of the
diesel fuel sold in that state will be B2, two percent
biodiesel. Because of this rule, just the removal of the sulfur
in the diesel fuel does not necessarily clean up the fuel. But
what it does is it enables pollution control emissions
optimization technology to be employed on the engines.
And so it will reduce, it will shift the environmental
drivers in the heavy duty platform away from nitrogen oxide
emissions and particulate matter emissions, which will be
reduced under this rule by 90 percent. And the remaining
emissions will be air toxics and greenhouse gases. Those are
the remaining emissions that will need to be addressed in the
future of heavy duty advanced diesel technology.
Those also happen to be the emissions that biodiesel
addresses better than any currently available heavy duty
technology. According to the Department of Energy, biodiesel
reduces air toxic contaminants by up to 90 percent and has a
life cycle reduction of carbon dioxide of 78 percent. It could
be said that using biodiesel has the effect of putting a diesel
engine on a low carbon diet.
In addition to the energy and environmental benefits,
several independent economic studies have shown that biodiesel
provides significant economic benefits to the economy. A study
completed in 2001 by the USDA Office of Energy Policy and New
Uses in conjunction with the Economic Research Service, found
that an average annual increase equivalent to 200 million
gallons of soy based biodiesel demand boosted the total crop
cash receipts by $5.2 billion cumulatively by 2010, resulting
in an average net farm income increase of $300 million per
year.
A number of other economic studies have been completed
which are consistent with these findings and can be made
available to the Subcommittee upon request.
Mentioned previously have been two very important pieces of
legislation which are currently being considered by Congress.
The Volumetric Ethanol Excise Tax Credit, which biodiesel is
included in those provisions in the Senate version of those
provisions. I want to point out that biodiesel and ethanol are
complimentary fuels. The same farmers who grow corn also grow
soybeans in rotation and we would like to recognize the ethanol
industry for their leadership and their partnership in the
development of coordinated energy policy efforts.
So the very first and most important provision currently
being considered in our view that can be passed and should be
passed and must be passed this legislative session would
include the VEETC provisions. Congressman Hulshof and
Congressman Pomeroy have led a bipartisan effort in the House
to get those provisions passed in the House and Chairman Graves
and Congressman Miller have served as excellent advocates, as
well, supporting those provisions.
In addition to the VEETC provisions, also mentioned were
the renewable fuel standard provisions. Biodiesel has been
included as an eligible fuel under the renewable fuel standard.
If the renewable fuel standard and the biodiesel provisions are
included in the VTEEC, we see an extraordinary future for
biodiesel fitting into the future of heavy duty diesel
platform.
If those provisions pass, biodiesel will be incorporated
into future diesel fuel as a renewable fuel additive to solve
the lubricity issues, to meet the renewable fuel requirements
and to take advantage of the lubricity operational issues in
ultra-low sulfur diesel fuels.
Unlike some other alternative fuels, low blends of
biodiesel can be transported by existing petroleum pipelines.
We know this because it is already being done in Europe. The
EU, in fact, has adopted B5 as the primary greenhouse gas
reduction strategy.
In closing, Mr. Chairman, the VTEEC and the RFS will have a
positive impact on the biodiesel and ethanol industries and
would result in a dramatic improvement in our nation's energy
security, environment and economy. The importance of biodiesel
for the nation's economy has never been greater. Oil prices are
now at record highs and are once again threatening to harm the
U.S. economy. Biodiesel and ethanol represent proven
technologies that can be brought to bear immediately to
supplement our existing energy supplies, using existing
domestic agricultural resources we have today and con continue
growing tomorrow. Thank you.
[Mr. Jobe's statement may be found in the appendix.]
Mr. Graves. Thank you, Mr. Jobe. I might add, too, you
mentioned some of the basic benefits in your testimony, it just
plain smells better, also, when you get it on your hands,
particularly.
We are now going to open it up for questions and I know I
have several that have come up. I want to start with Mr. Adams.
You mentioned in your testimony that ethanol can save the
Federal Farm Program $2 billion a year. And at a time when
every time we pass a farm program, we come under fire from a
lot of individuals who do not understand farm policy in my
opinion and this would be one of the things I think would help
sell farm policy and obviously a savings to the federal
government. Could you elaborate on that just a little bit?
Mr. Adams. Well, certainly the fact that the price of corn
has increased because of ethanol, you know, a few years ago we
went through the exercise of trying to capture the best LDPs
and you are familiar with that, since you are a farmer. Well,
when we had this increased price because of increased demand,
we are not struggling to beat our neighbor and our LDP
payments. You know, that was kind of the pride of the coffee
shop, what did you get today? Well, we do not have to do that
anymore.
So if we can portray this to the consumer with some type of
a media campaign or whatever and the corn growers certainly
could be involved in something like that, but the consumers
have to become aware that this renewable energy situation is
going to save them taxpayer money. And, you know, I do not
really know how to get that across to the consumer, but that is
what we have to do.
Mr. Graves. Well, you are helping to do that right now.
Mr. Adams. Okay.
Mr. Graves. Appreciate that. Mr. Hurst, I have a question
to Charlie about you said that ethanol would be more desirable
with the use of hydrogen fuel cells. You just touched on that
for just a minute. Could you expand on that a little bit? I am
not as nearly familiar with hydrogen fuel cells as obviously I
am with the ethanol biodiesel industry, but how ethanol would
compliment that or how the hydrogen fuel cells would compliment
ethanol. And anybody else who might want to weigh in on that.
Mr. Charles Hurst. Several years ago I went to Iowa State
and they were, at that time, the Iowa Corn Growers were funding
a study in Iowa State on fuel cells. And the man that was
running this experiment for the corn growers up there said that
ethanol was really a little bit better fuel than gasoline
because they could get that hydrogen out of it by fuel cells a
little bit better than they could from gasoline. Of course, he
was also funded by corn growers wanting to use ethanol, too. So
you have to take all these considerations into it.
But we see some talk about going to hydrogen fuel vehicles
and then we see about them having fuel systems that are
infrastructure that will supply this hydrogen. I do not think
that is feasible, to be honest. It has to be under such high
pressure. If we are going to pull into a filling station as it
were and fill up with hydrogen, it has to be under such high
pressure, it has to be under such high pressure in the vehicle,
I think the fuel cell is where we are going to go with this
technology. And then we can fill up with alcohol or with
gasoline and it will convert to hydrogen to be used in the fuel
cell in the vehicle. And I think this is the technology that is
coming.
When the President talked about hydrogen, we wanted to go
to a hydrogen economy, I think we are going to have to go via
the fuel cell rather than just using hydrogen as such, you
know. Phil is probably more versed on that subject than I am.
Do you agree that raw hydrogen put into our cars is probably
not feasible?
Mr. Lampert. Well, yes, and certainly, Mr. Chairman, thank
you. I believe the general public believes that the fuel cell
and the hydrogen business is like a perpetual motion machine,
that once it starts, you are always going to have hydrogen
being generated and that is completely false. Hydrogen, the
production of hydrogen or stripping it from water, requires
energy, today, very high amounts of energy compared to the
output.
I believe what Charlie is referring to, why continue to use
a fossil fuel to produce hydrogen when we could use a renewable
domestic fuel such as alcohol, produced from corn, use some
type of commodity renewable to produce the energy input.
Mr. Graves. Does biodiesel have a future in fuel cells,
also?
Mr. Jobe. Yes, there have been studies performed, including
a study just funded by the Iowa Soybean Board, which indicates
that biodiesel offers some excellent benefits as a fuel cell
fuel. It meets all of the criteria as a fuel cell fuel. It is
an excellent hydrogen donor. It is easily reformed and it fits
within the existing liquid petroleum infrastructure that we
currently have.
I think as the other panelists were saying, the government
has put a real emphasis on development of fuel cell
technologies and I hope that that pays off. But I caution,
because it seems like there maybe has been some overpromising
of that technology. We still are several years away from that
technology of being made widely available, especially in heavy
duty technology.
It is going to be an awfully long time before you see a
fuel cell bulldozer or fuel cell semi-truck. In fact, Phil and
I were just at a conference this weekend where Ford had,
unveiled its fuel cell vehicle. And when it came time to go,
they pushed it out the door and loaded it on a diesel truck and
hauled it off. So it is a few years down the road,but it is an
awfully long time before fuel cells are going to be made
available in the heavy duty form.
There has been some more promising developments for fuel
cells in industrial applications, for example, in light duty
applications. But until that time, ethanol and biodiesel meet
those criteria for the development of an excellent fuel cell
fuel.
Mr. Graves. Mr. Dinneen?
Mr. Dinneen. Yes, Mr. Chairman, just to underscore just a
couple of points here, because there is no question that
everybody is enamored with hydrogen technology and the fuel of
the future and it all makes sense. And it is going to happen.
But if all we do is transfer our dependency on petroleum in the
internal combustion engine to a dependency on petroleum derived
hydrogen for fuel cells, we have not helped each other. And
there is no question that ethanol can be a renewable source of
hydrogen that makes a great deal of sense. There is an ethanol-
based fuel cell in operation today in Peoria, Illinois. We are
doing a lot of research. The government needs to do a little
bit more research on it, as well. Renewably derived hydrogen
makes the most sense.
Mr. Graves. Thank you. I have a lot of questions, but I
will go ahead and give Mr. Miller a chance to ask anything.
Mr. Miller. Thank you. I would like to continue on the same
subject. During the President's State of the Union address, he
devoted a paragraph to developing fuel cells, hydrogen fuel
cells, that it was going to be a process that went straight
from hydrogen to water, and use hydrogen directly as a fuel.
What I heard after that was a great deal of skepticism about
that as the next technology that we needed to develop for a
variety of reasons. One is that hydrogen does not exist in
nature as a readily available fuel. What I heard mostly is that
it is stripped out of natural gas. And natural gas is a fossil
fuel, which is also finite, upon which we are also dependent on
other countries, in fact, pretty much the same countries that
we are dependent upon for petroleum, which does not improve our
hand a whole lot in trying to improve energy efficiency.
In addition, and that is not a particularly environmentally
friendly process, stripping hydrogen out of natural gas,
although the President presented it in the State of the Union
as something that only produced water. Well, turning hydrogen
into electricity may only produce water, but getting the
hydrogen, that is something else again.
And we have a massive, massive investment as a society in
the infrastructure to deliver a liquid fuel. And on this
planet, at least, hydrogen is not a liquid fuel.
I was very puzzled at the administration's focus on that
one source of alternative energy. And three to five, I cannot
recall the exact amount, seems like it was a proposal of $3 to
$5 million for research into the hydrogen fuel cell economy.
What is your impression? Why is it that you think this
administration is so focused on the hydrogen economy instead of
a bioeconomy? And I have also heard or read that there are
promising dramatic advancements in turning organic matter into
fuels, that biotechnology may increase dramatically the fairly
slow fermentation process of turning soybeans or corn into
fuel. Where does that technology stand, where does that
research stand and do you agree with this administration's
focus, apparently to the exclusion of other alternative fuel
sources? The President's budget would cut the renewable energy
system and energy efficiency improvements program by $12
million, the value added producer grants by $25 million, the
Commodity Credit Corporation's bioenergy program by $50
million. Do you agree with this administration's focus on the
hydrogen economy and hydrogen fuel as where we ought to be
going.
Ms. Werner, you can perhaps go first?
Ms. Werner. Thank you very much, Mr. Miller. I think a
number of my colleagues on the panel have made some important
points with regard to what is really involved in terms of
hydrogen production. I think that investments in fuel cells and
in additional research with regard to hydrogen are important.
But I do think that it has been oversold in terms of its role
within the next couple decades.
As has been made clear here, hydrogen is an energy carrier
as opposed to a source. Therefore, many of us who are concerned
about environmental implications are very, very concerned about
where the hydrogen would come from. And we feel very, very
strongly that if we are going to move towards the greater use
of fuel cells, it is absolutely critical that the hydrogen
should be derived from renewable resources.
And we see biofuels which can be reformed aboard vehicles
as being a very important source of that, which is readily
available and which works.
We would also suggest, however, that we think that there
are a variety of energy sources in terms of, again, fuels,
electricity, biobased products that are important to address
from a federal policy perspective. The Farm Bill programs which
you just cited and for which very, very significant cuts have
been proposed, we strongly disagree with those administration
proposals and very much hope that the Congress will restore
full funding for those. Last year, the Congress did restore
full funding for the Section 9006 program for renewable energy
programs and put some money back into the value add program,
but not full funding.
And one other point that I would just make in terms of
thinking about kind of the role of, I think, all of our
concerns are that we need to do something about our oil use,
natural gas, which is also very clean and highly valued
commodity. But we are all seeing huge cost increases in natural
gas creating a lot more outsourcing within our chemical
industry, creating huge impacts for agriculture because of the
run ups in natural gas. So I would suggest using natural gas
for hydrogen production isn't a good investment for our
country. And that, indeed, if we really want to reduce our use
of oil, perhaps the best thing would be for us to really
encourage our domestic vehicle industry to do a lot more in
terms of moving hybrids into the market and using that with
biofuels and then we are making a huge impact with regard to
our oil use. Thank you.
Mr. Miller. Mr. Dinneen, first of all, you can get to South
Dakota by traveling east from North Carolina, but it takes a
lot longer.
[Laughter.]
Mr. Dinneen. Ouch. I was hoping you had forgotten about
that by now.
Mr. Miller. You are also someone logical to address that
question. All of you are, but if you might address it as well?
Mr. Dinneen. We certainly agree with ESI and others on this
panel that have worked to restore some of the funding cuts that
have been proposed for renewable energy and we think that it is
critically important. We think that the investment that this
government can make in renewables is something that can pay
dividends in the near term. And we certainly support those
efforts to restore the funding.
In terms of looking at the hydrogen issue, I think it is a
question of what your focus is. Is it near term or long term
and I do not think any of us really dispute that hydrogen
represents a technology that is worth an investment in terms of
trying to determine where it can go. We do think that the focus
ought to be more on trying to get that hydrogen derived from
renewable resources as opposed to, you know, more petroleum
based sources. But the technology itself will certainly
develop.
You know, but I do not think that it is the administration
that simply has this hydrogen focus exclusive of anybody else.
I think it is something that has had bipartisan focus. Senator
Dorgan has had legislation in place, the Apollo project, that
many of us support because of what it will do in terms of
research for hydrogen. Has it been oversold in the near term? I
think Carol is probably right, it probably has been oversold in
the near term. But I do think it is worth an investment for the
promise it holds, so long as the source of the hydrogen is
renewable.
Mr. Miller. Anyone else wish to address that point? You do
not have to, but you can.
Mr. Adams. Mr. Dinneen made the comment that I was gong to
make and that is that in my training as an economist, you know,
we talk on one hand and then on the other hand. He suggested in
the short term and in the long term, and I really think that,
you know, fuel cell concept is a long term concept. And we are
facing a short term energy crisis right now and this is what we
need to be concerned about. It is not to deny that hydrogen and
fuel cells are going to be on the horizon and be very important
ten, 20, 30 years from now, but what are we going to do in the
next five to ten? This is where renewable fuels, I think, can
really place an important impact on our energy crisis. And one
more comment.
Mr. Miller. Okay.
Mr. Adams. I hate to admit that hydrogen can come from
somewhere else than ethanol, but in southwest Minnesota and
northeast Iowa, we have a huge amount of--or a large array of
wind farms developing. And you can get hydrogen from
electrolysis and using a surplus energy from these wind farms
when you have the surges and low usage period, in a low usage
period you could use the surplus electricity from these wind
farms to produce hydrogen. Now that is a concept that is not
talked about too much. And we are not using hydrogen fuels or
fossil fuels to make the hydrogen, nor are we in a case of even
ethanol using fossil fuels to make ethanol to make hydrogen.
So it is a long way away, but we have to be concerned about
the short run, I think. Thank you.
Mr. Miller. Thank you. You know, of course, that President
Truman said he was looking for a one-handed economist.
[Laughter.]
Mr. Adams. Yes, yes.
Mr. Miller. One other criticism that I have heard is that
the research, by its very nature, is unpredictable. The
problems that seem absolutely insurmountable yield to a
solution and problems that seem imminently solvable do not. By
focusing so heavily on one alternative fuel source, we may find
ourselves looking for, the phrase I have heard is off ramp for
our research in some period of time, five, seven, ten years,
when the problems that we thought were solvable were not.
And we would then find ourselves five or seven or ten years
behind in starting on some other technology. Do you agree that
we should be moving on several fronts at one time and do you
think we are doing it now in our research into alternative
fuels? That can be anybody that wants to answer. Ms. Werner, do
you want to give it a shot?
Ms. Werner. Sure. Then I will turn to my colleagues. I do
think that we need to be investing in a variety of approaches
at the same time and for the same reason that I also suggested
that I think we need a suite of supporting policies, rather
than relying on just one kind of approach if we are really
going to be serious about addressing the overall energy
situation confronting our country.
And I think that we need to recognize, too, that energy and
environment are kind of the flip side of the same coin and that
obviously that is why we feel so strongly about the whole row
of agriculture being able to produce a whole array of renewable
energy products. And that all of those really need to be
pursued much more aggressively as well as policies that will
also help us really develop the market and get those various
important technologies deployed.
Mr. Dinneen. Congressman, I would suggest that the
Department of Energy and the Department of Agriculture have
been working fairly well together to develop an array of
research programs that will certainly move renewable fuels
forward. You can produce ethanol from virtually any
agricultural feed stock. There is a plant seeking financing in
North Carolina today that is looking to produce ethanol from
sweet potatoes. There is a plant in New York today that is
looking for financing to produce ethanol from municipal solid
waste.
The Department of Energy, the Department of Agriculture
have had a number of research projects over the years looking
at producing renewable fuels like ethanol from a variety of
feed stocks. And, in fact, I think there is the potential for
the economic development opportunities that Congressman Hulshof
talked about earlier today to have that be available to
communities all across the country, whether they happen to be
in the grain belts or not. Because the opportunities for
ethanol production exist everywhere.
Mr. Jobe. I would like to add that I think one of the
reasons fuel cell technology has been embraced in such a way
that it has sort of been sold as the silver bullet solution and
I would propose that there is no such thing as a silver bullet
solution, that we need more of a silver buckshot solution.
We do not have a diversified energy portfolio right now and
that is what we need to work toward. We need an array of
options. All of those mentioned here, but in addition to that,
looking at conservation and other things. For example, in
Europe, Europe has not had such a strong pursuit of policies to
keep petroleum prices low and therefore, they have an emphasis
on conservation and fuel economy. So the consequence of that is
that about half of all the passenger vehicles on the road are
diesel, because diesel has up to 50 percent more fuel economy
than gasoline versions.
So the U.S., as a comparison, in the United States, only
about two percent of our cars on the road are diesel. So we
have an enormous potential to increase and improve efficiency
in our transportation sector.
Mr. Miller. Go right ahead.
Mr. Adams. Chairman Graves, there is a saying that what
comes around, goes around. I have a 1926 Model T at home. Henry
Ford drove his first cars, as I understand it, on alcohol. And
then as the automobile industry grew, the alcohol industry
could not keep up and the fossil fuel industry was born.
Now we are at this point in life and production of ethanol
has become much more efficient. There are new enzymes developed
every year and new technologies and energy conservation and
ethanol plants. So all of a sudden, we are becoming very
competitive with the fossil fuel industry, plus it is produced
domestically. So maybe old Henry was not so dumb to start with.
You know, maybe it is time to go back to old Henry's
philosophy. Thank you.
Mr. Graves. Let us talk a little bit about the economic
development that these products do bring to our rural
communities. It was mentioned and I do not know which member of
the panel mentioned the number of plants that are out there,
how many plants are right now producing cooperatives, but
somebody may?
Mr. Dinneen. Well, there are 76 ethanol plants across the
country. More than 40 percent of those are farmer owned ethanol
plants today.
Mr. Graves. What are the other 60 percent? Are they private
industry?
Mr. Dinneen. Privately held companies.
Mr. Graves. I may ask everybody this, at the rate that we
are going, what will the rate of growth be in ethanol
production? There is obviously a demand. The California demand
alone requires a lot, but how fast are we growing? How fast are
we growing to grow? What is the potential in the next five to
ten years as far as ethanol plants? Anybody can answer.
Mr. Dinneen. Mr. Chairman, there are 12 plants currently
under construction that will add another 500 million gallons of
production capacity when it is on stream, bringing the
industry's total capacity to almost four billion gallons. We
can certainly grow as fast as we need to grow. A lot will
depend upon what policies this Congress puts in place, in terms
of how quickly we have to grow. But we have seen 32 percent
growth last year. I believe it was 20 some odd percent growth
the year before. This year we will likely see close to 30
percent growth again.
Our rate of growth has been nothing short of phenomenal and
it is a testament to, you know, farmers across this country
that have invested their own money and invested their own time
and energy to create these ethanol plants all across the
country.
Mr. Graves. I mean, that is a huge, and that could have a
huge impact on our communities, just like Mr. Hurst mentioned.
You know, in a town of 300, that is a big impact. These small
communities, they are not going to be able to go out and get an
industry, you know, Ford Motor Company or Chevrolet is not
going to locate in Craig, Missouri or Macon, Missouri or
whatever the case may be.
And I have always been told that we need to stick to what
we already know. And what we do know in these small communities
is agriculture and that directly ties in to this energy
production. I think it is an incredible opportunity we have and
that is the sideline. Not to mention the national security
issues that we have out there dealing with our energy
dependence, not to mention the environmental impact that we can
have as far as, you know, ethanol and biodiesel goes.
I might direct that question to Carol, too, even on the
environmental impact. I could not think of a more
environmentally friendly product than either biodiesel or
ethanol. And we talk about oil spills and that sort of thing.
You know, ethanol is completely water soluble. You don't have
the environmental impact, even if you do have a spill. You
might address that just a little bit.
Ms. Werner. Sure, Chairman Graves. Because that is one of
the reasons why we are so supportive of biofuels is because
they do provide a superior way to provide fuel in an
environmentally sound way in terms of protecting our water
shed, helping reduce harmful air pollutants as well as
obviously really reducing greenhouse gas emissions.
We have seen a lot of work done over the last decade with
regard to the connection between our current fuels, in terms of
fossil fuels, in public health, where we now know lots more
about that in terms of the toxics that are in these fumes and
the damage that that is doing to children across the country.
So I think, you know, when you start to just add up all of
these benefits, it is really, really critical that people
across the country understand that. It is also very important
that biofuels not be seen as oh, if we are going to have a tax
incentive here or however it works, that it is not just a
giveaway to midwest farm states. But that, indeed, it is really
serving national concerns, national needs. And that is why it
is so important to also get these industries developed across
the country, helping communities.
Biomass is also heavy. You know, it also means the more
that we can do in terms of having new businesses sprout up
across the country which can really help develop indigenous
resources in every single state, which helps economic
development everywhere and really helps build a much broader
base of support for overall biofuels. Thank you.
Mr. Graves. It is interesting that ethanol and biodiesel
production and renewable fuels have moved from the farm policy
arena and it has now moved into the energy arena, which I think
is good, because it helps out, you know, it is addressing all
consumers, rather than just one segment.
Anybody have anything else to add today? Yes?
Mr. Brooks Hurst. Yes, Mr. Chairman, just to expand a
little bit on Carol's comment. I was playing golf several years
ago with the producer of MTBEs and he was being rather
defensive because it was just at the start of them taking hits
and environmental concerns with spills from MTBEs. And he said,
well, you ethanol producers are going to have problems, too.
And when you get in the groundwater and I told him that I had
actually heard of some people purposefully mixing alcohol with
water, to drink.
[Laughter.]
Mr. Graves. I have heard similar comments, too, in Craig,
Missouri, that producing alcohol in the bottoms of whole
counties is nothing new. They have been doing it for years. It
is just that they have got railroad cars pulled up to the still
rather than jugs.
Well, I would like to thank everybody for being here today.
We did not even get a chance to talk, Mr. Lampert, I took a
look at this and the number of cars that are available as far
as hybrids go and this is exciting, too. In fact, I am going to
look into that even more. You mentioned in your testimony the
increase we are going to see. But I am sorry we were not able
to cover everything. But I appreciate everybody coming out
today. This has been a fantastic hearing and, if nothing else,
what we are trying to do is bring some more attention to the
energy debate and more attention to renewable fuels like
biodiesel and ethanol. We have some hefty increases in funding
for renewable fuels in the Energy Bill, but we do have to get
them passed. The House passed the conference report, what we
thought was an agreement between the House and the Senate in
November. The Senate has not taken it up yet, but we need to
continue to push for that. We need to continue to get that
done. It is vitally important that we have an energy policy.
I would much rather be dependent on our farmers in the
United States for our energy production than I would countries
like Saudi Arabia. It just makes sense, not to mention the
environmental impact it has, the impact it has on small
communities and keeping our young people in our small
communities, having a reason for them to come back to our small
communities. It is a win-win everywhere, national security,
farmers, consumers. It just makes sense.
We are going to continue to bring light on this subject and
show the national impact that it has, but I appreciate
everybody coming out today and giving your testimony. This
hearing is adjourned.
[Whereupon, at 11:43 a.m., the Subcommittee was adjourned.]
[GRAPHIC] [TIFF OMITTED] T4135.001
[GRAPHIC] [TIFF OMITTED] T4135.002
[GRAPHIC] [TIFF OMITTED] T4135.003
[GRAPHIC] [TIFF OMITTED] T4135.004
[GRAPHIC] [TIFF OMITTED] T4135.005
[GRAPHIC] [TIFF OMITTED] T4135.006
[GRAPHIC] [TIFF OMITTED] T4135.007
[GRAPHIC] [TIFF OMITTED] T4135.008
[GRAPHIC] [TIFF OMITTED] T4135.009
[GRAPHIC] [TIFF OMITTED] T4135.010
[GRAPHIC] [TIFF OMITTED] T4135.011
[GRAPHIC] [TIFF OMITTED] T4135.012
[GRAPHIC] [TIFF OMITTED] T4135.013
[GRAPHIC] [TIFF OMITTED] T4135.014
[GRAPHIC] [TIFF OMITTED] T4135.015
[GRAPHIC] [TIFF OMITTED] T4135.016
[GRAPHIC] [TIFF OMITTED] T4135.017
[GRAPHIC] [TIFF OMITTED] T4135.018
[GRAPHIC] [TIFF OMITTED] T4135.019
[GRAPHIC] [TIFF OMITTED] T4135.020
[GRAPHIC] [TIFF OMITTED] T4135.021
[GRAPHIC] [TIFF OMITTED] T4135.022
[GRAPHIC] [TIFF OMITTED] T4135.023
[GRAPHIC] [TIFF OMITTED] T4135.024
[GRAPHIC] [TIFF OMITTED] T4135.025
[GRAPHIC] [TIFF OMITTED] T4135.026
[GRAPHIC] [TIFF OMITTED] T4135.027
[GRAPHIC] [TIFF OMITTED] T4135.028
[GRAPHIC] [TIFF OMITTED] T4135.029
[GRAPHIC] [TIFF OMITTED] T4135.030
[GRAPHIC] [TIFF OMITTED] T4135.031
[GRAPHIC] [TIFF OMITTED] T4135.032
[GRAPHIC] [TIFF OMITTED] T4135.033
[GRAPHIC] [TIFF OMITTED] T4135.034
[GRAPHIC] [TIFF OMITTED] T4135.035
[GRAPHIC] [TIFF OMITTED] T4135.036
[GRAPHIC] [TIFF OMITTED] T4135.037
[GRAPHIC] [TIFF OMITTED] T4135.038