[Congressional Record Volume 148, Number 14 (Thursday, February 14, 2002)]
[Senate]
[Page S845]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  THE BIODIESEL PROMOTION ACT OF 2002

  Mrs. LINCOLN. Mr. President, yesterday I introduced S. 1942, the 
``Biodiesel Promotion Act of 2002,'' to provide tax incentives for the 
production of biodiesel from agricultural oils. I was pleased to be 
joined by Senators Dayton and Johnson as original co-sponsors of my 
bill.
  I was also pleased yesterday to be joined by Senator Grassley in 
offering S. 1942 in amendment form to the Senate Finance Committee 
Energy Tax Incentives legislation. My amendment was included in the 
legislation with an overwhelmingly favorable vote of 16 to 5. The 
amendment differs from S. 1942 only in the length of authorization of 
the program. Due to budget constraints, the amendment authorizes the 
program for three years as opposed to the bill language of a ten-year 
authorization.
  S. 1942 is a start, but we must make sure that these incentives are 
not just a flash in the pan. We must ensure that biodiesel becomes a 
central component of this nation's automobile fuel market.
  S. 1942 will provide a partial exemption from the diesel excise tax 
for diesel blended with biodiesel. Specifically, the bill provides a 1-
cent reduction for every percent of biodiesel blended with diesel up to 
20 percent.
  The bill also provides for reimbursing of the Highway Trust Fund from 
the USDA Commodity Credit Corporation, (CCC). I believe this procedure 
will protect the Trust Fund from lost revenues due to the biodiesel 
incentive while providing a much-needed boost to our nation's biodiesel 
industry. The cost to the CCC would be offset at least initially by the 
savings under the marketing loan program.
  Biodiesel, which can be made from just about any agricultural oil 
including oils from soybeans, cottonseed, or rice, is completely 
renewable, contains no petroleum, and can be easily blended with 
petroleum diesel. A biodiesel-diesel blend typically contains up to 20 
percent renewable content. It can be added directly into the gas tank 
of a compression-ignition, diesel engine vehicle with no major 
modifications. Biodiesel in its neat or pure form is completely 
biodegradable and non-toxic, contains no sulfur, and it is the first 
and only alternative fuel to meet EPA's Tier I and II health effects 
testing standards.
  Biodiesel also has many environmental and operational benefits. One I 
would like to highlight is the fuel's lubricating characteristics. Even 
at very low blends, biodiesel contributes operational and maintenance 
benefits to diesel engines by continuously cleansing the engine as it 
runs. This is even more significant when using ultra-low sulfur diesel. 
With the EPA's new rule to reduce the sulfur content of highway diesel 
fuel by over 95 percent, biodiesel stands ready to help us reach this 
requirement.
  Farmers in my State of Arkansas and across the country began 
investing in the development of biodiesel because of the economics of 
the farm industry. Producing biodiesel from farm commodity oils will 
provide a ready new market for our farm products. Currently, 
agricultural oils are widely produced for use in our food markets. 
However, large supplies of vegetable oils in the world market have 
resulted in depressed commodity prices in the domestic market.
  More than a decade ago, soybean growers recognized that the 
traditional approach of riding out a depressed market by storing 
surplus soybean oil until better times would no longer work. The 
industry had to do more. It needed a proactive and aggressive plan to 
develop new markets and expand existing ones. Biodiesel is one of these 
new markets identified with true potential for displacing large 
quantities of soybean oil.
  For cotton, the cottonseed is presently about 20 percent of the value 
of the crop. Biodiesel will open new value-added uses for the 
cottonseed oil at a time when new uses and markets are extremely 
important because of these hard economic times. And for our rice 
farmers, biodiesel will provide additional incremental increases in 
value to our rice crop and open up a new outlet for the co-product of 
rice bran oil.
  A Department of Energy and Department of Agriculture study has shown 
that biodiesel yields 3.2 units of fuel product energy for every unit 
of fossil energy consumed in its life cycle. By contrast, petroleum 
diesel's life cycle yields only 0.83 units of fuel product energy per 
unit of fossil energy consumed. Such measures confirm the ``renewable'' 
nature of biodiesel.
  Even after years of research and market development, biodiesel is not 
yet cost-competitive with petroleum diesel. In order to be so, market 
support and tax incentives are needed. I believe the provisions 
provided in this bill will help in leveling the field for biodiesel 
blends and help jumpstart this exciting new industry.
  The time is right for this investment. It is right for our rural 
economy, for our environment, and for our national energy security.

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