[Congressional Record (Bound Edition), Volume 154 (2008), Part 3]
[Senate]
[Pages 3192-3193]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       BENEFITS OF RENEWABLE FUEL

  Mr. THUNE. Mr. President, this last year, Americans sent almost half 
a trillion dollars, almost $500 billion, overseas to purchase imported 
oil from other countries around the world. Think about that massive 
transfer of wealth and what that means for our national security 
because, in many respects, a lot of those dollars being used to 
purchase imported fuels are going to countries that are not favorable 
toward the United States. Of course, some say it is a world market, let 
the market work.
  The difference is that most of our trading partners around the world 
are people we consider to be at least friends, allies, folks we do 
business with. They are not countries that are funding organizations 
that are trying to kill Americans. Regrettably, what we end up doing is 
funding both sides of the war on terror, because we send almost half a 
trillion dollars annually to foreign countries, petro dictators around 
the world who use those dollars to fund terrorist organizations that 
are designed to kill Americans, and then we end up having, of course, 
to fund our military to go fight the very same terrorists. It seems 
like a very misguided policy.
  I make that point because I think we have a dangerous dependence on 
foreign energy. Today, 65 percent of our petroleum comes from outside 
of the United States. As most of us know, the fuels in this country are 
mostly petroleum based. The reason I say all that is I think we have an 
important decision to make in this country about whether we are going 
to continue to subsidize foreign governments, petro dictators who use 
those dollars that transfer wealth out of this country to fund 
terrorist organizations that attack Americans, or whether we are going 
to make an investment in the United States that provides benefits to 
the economy in America and provides jobs for Americans. I think that is 
an important decision we have to make.
  For the past several years, this Congress as a matter of policy has 
tried to put into place incentives to increase the production of 
renewable energy, and with some degree of success. If you look at last 
year and this year, by the end of this year, we will be at about 7.5 
billion gallons of ethanol produced in the United States. There are 
some 160, I think, ethanol biorefineries in this country. If you look 
at it, 22 States are home to some of those, with a collective capacity 
of over 7.5 billion gallons. There are sixty biorefineries under 
construction and several plants are in the process of expansion. That 
is a great story for America and for our agricultural economy. It is 
also a great story for our national security, in my view.
  Lately, we have had a lot of attacks launched on the ethanol 
industry, and on renewable fuels generally. Many of them have been, 
again in my view, very misguided and misleading in terms of the 
reporting that has been done regarding food prices. If you look at 
several editorials recently, the New York Times went out of their way 
to discount the impact of high energy prices and worldwide demand for 
protein as reasons for food price increases. Rather, they decided to 
blame ethanol by stating, ``The most important reason for the price 
shock is the rich world's subsidized appetite for biofuels.'' The 
editorial board claims, ``The benefits of this strategy are dubious.''
  A February Washington Post article, entitled ``The Problem With 
Biofuels,'' leads the public to believe that biofuels will only serve 
to starve people. The article quotes a university study and states, 
``By putting pressure on global supplies of edible groups, the surge in 
ethanol production will translate into higher prices for both processed 
and staple foods around the world.''
  The food versus fuel debate is an important debate to have. However, 
it has to be based upon facts and not anti-
renewable fuel rhetoric.
  It is a fact that energy prices have a 2-to-1 greater impact on food 
prices relative to the price of inputs such as corn.
  Last year, John Uranchuck of LECG issued a report detailing the 
impact of rising energy prices on the price of food. According to that 
study,

       Increasing petroleum prices have about twice the impact on 
     consumer food prices as equivalent increases in corn prices. 
     A 33 percent increase in crude oil prices--the equivalent of 
     $1 per gallon over current levels of retail gasoline prices--
     would increase retail food prices measured by the CPI for 
     food by 0.6 to 0.9 percent. An equivalent increase in corn 
     prices--about $1 per bushel over current levels--would 
     increase consumer food prices only 0.3 percent.

  In December 2007, Informa Economics issued a report called 
``Marketing Costs and Surging Global Demand for Commodities Are Key 
Drivers of Food Price Inflation.'' This report also concluded that the 
price of raw commodities is not the leading component of the Consumer 
Price Index for food. Rather, this report correctly identified rising 
energy and transportation costs as leading causes of food inflation.
  To place the blame for food inflation on biofuels and the rising 
prices of certain commodities is simply misguided. According to the 
U.S. Department of Agriculture, costs of food inputs only account for a 
fraction of food prices. Specifically, labor, packaging, 
transportation, advertising, and profits account for 68 cents of every 
dollar a consumer spends on food.
  The long-term outlook for corn prices under the expanded renewable 
fuels standard is somewhere in the $3.25 to $3.50 per bushel range. To 
put that into perspective, so the average person around the country can 
understand what I am talking about, the average box of corn flakes 
contains about 10 ounces or one ninetieth of a bushel of corn. Even at 
$4 corn--$4 a bushel corn--that amounts to 5 cents of corn in a box of 
corn flakes. Think about that. A box of corn flakes. Everybody assumes 
the farmer, because of high corn prices, is cutting a fat hog, but 5 
cents of that goes back into the farmer's pocket. Attributing food 
inflation to biofuels and corn-based ethanol is simply untrue.
  Now, with respect to climate change, because we have heard a lot of 
discussion as well and criticism of the ethanol industry with regard to 
how it impacts that debate, critics of renewable fuels have also 
started blaming climate change on renewable energy. I find that hard to 
believe, as well, because the purpose of biofuels is to replace 
petroleum as a fuel source. For years, environmentalists have decried 
petroleum as a major emitter of harmful carbon emissions. Today, we 
have a homegrown alternative that is displacing

[[Page 3193]]

more and more petroleum by the day. Some are claiming now that ethanol 
is creating more global warming. If our national policy is to manage 
climate change, falsely blaming ethanol for global warming is not 
helpful to the cause.
  According to the Argonne National Laboratory, regular blends of 
ethanol, gasoline containing 10 percent ethanol, reduce greenhouse gas 
emissions by 18 to 29 percent relative to regular gasoline.
  As more ethanol is produced and consumed, our Nation's carbon 
footprint will continue to shrink. In 2006, ethanol use in the United 
States reduced carbon dioxide emissions by approximately 8 million 
tons. Such a reduction is the equivalent of removing 1.21 million cars 
from the road.
  As Congress continues to debate climate change legislation and the 
causes of global warming, it is important to set the record straight. 
Ethanol production is a carbon sink, not a net producer of carbon 
emissions. Furthermore, as new types of cellulosic ethanol come online, 
the carbon-reducing benefits of ethanol are only going to increase.
  Ethanol may be able to be blamed for some other transformations in 
our economy. For one, increased ethanol production is allowing our 
demand for gasoline to go down and displacing foreign imports of oil. 
Again, I point to some of the statistics that bear that out. If you 
look at the amount of ethanol that is being produced in America today--
and this is based on a 2007 number--in 2007, the ethanol that was 
produced, 6.5 billion, in this country displaced the need for 228 
million barrels of oil, saving American consumers more than $16 billion 
or $45 million a day from going to countries, as I said earlier, 
outside the United States and enriching petrodictators who would do us 
ill will.
  If we look at the impact on tax revenues coming into the Treasury, 
the ethanol industry generated an estimated $4.6 billion in Federal tax 
revenue and $3.6 billion in additional tax revenue for State and local 
governments. So if you couple that with the fact that according to the 
USDA--and I think this is an important point to make, too, by those who 
would criticize ethanol--according to the USDA, the increased demand 
for grain use in ethanol production reduced Federal farm program costs 
by more than $8 billion last year, meaning that even with the cost of 
the tax incentive that we use to encourage more production of ethanol, 
ethanol saved U.S. taxpayers, when you couple that with the additional 
tax revenue coming into the Treasury and the $8 billion that was saved 
because the Federal Government was not making farm program payments to 
farmers in this country, U.S. taxpayers saved more than $9.2 billion as 
a result of this industry.
  Right now, about 50 percent of the gasoline in this country is 
blended with ethanol, and before very long, we hope that from coast to 
coast we will have every single gallon of gasoline in this country 
blended with ethanol.
  But my point very simply is: This has been a great success story, one 
which has benefited and enriched our country, our farmers, people in 
this country who are working hard making a living contributing to a 
better quality of life for all Americans, as opposed to shipping all 
that wealth outside the United States to other countries.
  Let me restate what I started by saying at the very beginning, and 
that is that last year, we spent almost half a trillion dollars, almost 
$500 billion, in purchasing imported oil. That, again, makes absolutely 
no sense to me in light of these statistics that I shared. I think as 
we look at the future of this industry and the promise it holds and the 
benefit it holds, not only for the economy in this country but also as 
we get away from this dangerous dependence on foreign sources of 
energy, renewable fuels, biofuels, have a great future for America, and 
I believe we ought to be continuing to invest in making sure that those 
who are involved with that industry--our farmers, those who are 
constructing ethanol plants around this country, that we provide not 
fewer incentives but more incentives for this kind of biofuel 
production that, again, gets rid of the carbon in our atmosphere, 
cleans up our environment, lessens our dependence on foreign sources of 
energy, and puts dollars back into the pockets of hard-working 
Americans, farmers, the rural economy, creating jobs, helping grow the 
economy right here at home in the United States rather than shipping 
those dollars to some foreign country where, again, many of these 
dollars are used to turn around and fund organizations that are 
designed to undermine America's interests around the world.
  This debate will continue to percolate around this country, but when 
we get into this debate about food versus fuel, it is important we have 
the facts in front of us because this industry has undergone a lot of 
criticism of late. As I said before, I think much of it is misguided 
because it is based on misinformation and wrong facts. We need to have 
the facts in front of us, and then we can have a meaningful debate. 
Until that happens, we are going to hear more of these false attacks 
against an industry that is creating American jobs, helping reduce our 
dependence on foreign energy, and I hope, in the very near future, we 
will be able to increase the amount not only of production in this 
country but the amount of consumption because I believe in the very 
near future we will start seeing more and more momentum for increasing 
the blend rate.
  Right now, we blend 10 percent ethanol, as I said, in 50 percent of 
the gasoline in the country. I hope in the future we can increase that 
to 20 percent. The University of Minnesota completed a study where they 
compared effects of 10 percent and 20 percent on materials 
compatibility, driveability--all those types of issues. The result of 
the data that came from that study was that you can move to a 20-
percent blend, a higher blend, an intermediate blend right now and have 
no impact on any of those issues.
  The issue of emissions is still being studied. The renewable energy 
laboratory in Golden, CO, and the Department of Energy and EPA are 
undertaking some studies. When that data comes in, I believe it will 
show what the University of Minnesota study has shown and that is you 
can go to a higher blend with minimal impact and, in fact, in many 
cases with a better result; that we should move very quickly. I am 
going to encourage the administration and continue to try to influence 
that decisionmaking process in a way that will increase the amount of 
ethanol that is used in this country so, again, we can achieve the many 
benefits that I think dependence on American agriculture creates for us 
as opposed to our dependence upon foreign energy.
  I yield the floor.

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