Bi-partisan agreement on ethanol deserves support

By Tom Buis, CEO, Growth Energy,
Biofuels Digest Columnist

During this time of political bickering and fierce partisan lines, it’s heartening to know that – when something crucial is on the line –there are senators who are willing to work toward a bipartisan compromise.

Earlier this month, three influential Senators tackled one of the nation’s most challenging issues right now: how to invest in a renewable fuels policy that will strengthen our country’s economy and national security while also cutting the federal budget.

Sens. Amy Klobuchar, D-Minn., John Thune, R-S.D. and Dianne Feinstein, D-Calif., forged a forward-looking and bipartisan agreement that will help advance the market for ethanol in this country, but will also return money to the federal treasury to address our country’s pressing budget deficit.

These Senators recognize that supporting the ethanol industry can help the entire country, by creating jobs that cannot be outsourced, by producing a fuel that reduces harmful emissions by more than 59 percent compared to conventional gasoline and by reducing our dependence on foreign oil.

In their proposal, the Senators agreed to end the existing 45 cent blender’s tax credit early, and in return, provide $1.3 billion in savings toward deficit reduction. More importantly, the remaining third will be used to encourage production of ethanol from cellulosic biomass and to invest in the installation of Flex Fuel pumps.

Today there are about 9 million Flex Fuel Vehicles in this country and the owners of these vehicles have a choice of fuel blends when they pull up to a Flex Fuel pump: E30, E50 or more. But unfortunately, there are fewer than 300 Flex Fuel pumps in the entire nation. Flex Fuel pumps allow the consumer to choose their fuel – conventional gasoline or varying level blends of ethanol – based on price and performance.  If we put more Flex Fuel pumps at retail stations across the nation, Americans will have a genuine choice in the marketplace.

Given the choice, I believe most Americans would choose domestic ethanol over gasoline refined from imported oil. Ethanol is cheaper than gas—as much as 35 cents less than gasoline—so it’s easier on the pocketbook. And, ethanol creates U.S. jobs instead of sending our money overseas to places like Abu Dhabi or Saudi Arabia.

By extending the tax credit for cellulosic biofuels and extending the small ethanol producer tax credit, this compromise offers incentives for small startups as well as larger and more established companies to develop and produce the next generation of biofuels – cellulosic ethanol –from feedstocks, including plant and wood wastes, municipal garbage and algae.

As with most compromises, this deal is not perfect. We could do much more to give motorists access to alternative fuels in the marketplace. But considering the rancorous debate on Capitol Hill, the fact that there is bipartisan agreement is reason enough to give their framework consideration. All three senators deserve praise for their work for setting a reasonable path forward for the domestic ethanol industry and our entire nation.

Tom Buis is CEO of Growth Energy, the leading voice for the U.S. ethanol industry.