Prepared Floor Statement of Senator Chuck Grassley of Iowa
Democratic Inaction on Biodiesel Tax Credit Means Tens of Thousands of Job Losses
Thursday, December 17, 2009
Mr. President,
As I rise today, our nation’s unemployment rate stands at 10 percent. For those without work, this is not just a recession, it’s a depression. We all agree that we should take whatever action necessary to jump-start our economy and get people back to work.
President Obama and Vice President Biden have been talking for months about the need to create “green jobs.” In fact, President Obama has held three public events in recent days to highlight his concern about the economy and the need to create jobs. Yesterday, the Administration apparently announced billions more in tax credits for renewable energy and energy conservation efforts.
It seems like nearly everyone in the Administration is touting the benefits of green jobs and a clean energy economy. It’s astonishing, then, that this Congress will head home for the Holidays while thousands of “green energy” workers receive pink slips and furloughs.
On December 31st of this year, the current biodiesel tax credit will expire. The biodiesel tax credit provides a $1.00 per gallon credit for biodiesel made from soybean oil or yellow grease and animal fats.
The tax credit is essential in maintaining the competiveness of this clean-burning, domestically produced green fuel. The tax credit exists to offset the higher cost of producing biodiesel compared to petroleum diesel. Without the tax credit, petroleum marketers will be unwilling to purchase the more expensive biodiesel, and demand will vanish.
In 2008, the biodiesel industry supported more than 51,000 green jobs. Because of the downturn in the economy and the credit crisis, the biodiesel industry has already shed 29,000 green jobs.
The industry is currently operating at around 15 percent of capacity.
Without an extension of the tax credit, all U.S. biodiesel production will grind to a halt. Plants will be shuttered, and workers will be let go. No one should be surprised by the upcoming expiration of this tax credit. It was extended most recently in October of 2008. So, we’ve known for 14 months that it would need to be extended by the end of 2009. The Senate has been in session nearly continuously for months.
Earlier this year, Senator Cantwell and I introduced a bill to extend the tax credit for five years and change it to a production tax credit.
There’s no excuse for inaction on this extension.
The Democratic leadership is content to leave here without doing the necessary work on extenders, believing that they can extend the tax provisions retroactively sometime early next year. But, retroactivity doesn’t help the U.S. biodiesel market from grinding to a halt on January 1, 2010, because without the incentive, biodiesel will cost much more than petroleum diesel.
While the House and Senate dither, thousands will lose their jobs.
Demand for dirty, imported petroleum diesel will increase. Investments in the domestic renewable fuels industry will lose value, and possibly disappear. It’s too bad that among all the talk of “green jobs” and a clean energy economy that Congress is unable to pass a simple extension of an existing tax credit.
Once again, the actions of the majority do not match their words. For all the talk, they will have failed all those in the biodiesel industry working today to reduce our dependence on foreign oil if we leave here without extending this critical tax credit before the end of this year.
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***Audio of Senator Grassley’s speech can be found by scrolling over “news center” and then clicking on “news conference call” on his website.