The Renewable Fuels Standard bill has been approved by the Senate Environment and Public Works Committee. Today, the Grassley backed ethanol program was introduced by Senate Republican Leader Bill Frist as an amendment to the energy bill, which is pending in the Senate.
"The strong support of President Bush, has been a big help with the Renewable Fuels Standard. I'm confident it will pass the Senate," Grassley said. "Ethanol is a particularly good alternative because ethanol can make an immediate difference for national security. We can start using more ethanol tomorrow and ramp-up quickly. It can have an impact this year and next year rather than five or ten years down the road."
The proposed renewable fuels standard would create as many as 300,000 jobs, replace 66 billion gallons of foreign crude oil by 2012, and increase net farm income by $6.6 billion a year. One analyst projects that 19 percent of last year's corn acreage nationwide would be needed to supply ethanol by 2012. Today about six percent of the corn crop goes into ethanol production.
"Renewable fuels like ethanol and biodiesel will improve air quality, strengthen national security, reduce the trade deficit, and expand markets for agricultural products," Grassley said.
Last year, the domestic ethanol industry produced a record 2.13 billion gallons of fuel, displacing approximately 3.75 billion gallons of foreign crude oil and using more than 800 million bushels of excess grain. Today's ethanol industry supports nearly 200,000 jobs nationwide. According to the Argonne National Laboratory, the use of ethanol-blended fuels reduced CO2-equivalent greenhouse gas emissions by approximately 4.3 million tons in the United States during 2002. This reduction is equivalent to removing the annual greenhouse gas emissions of more than 636,000 cars from the roads.
Grassley has a long history of promoting expanded use of renewable sources of energy. In 1992, he authored the first-ever wind energy production tax credit. In 1997 and 1998, he not only spearheaded the fight against efforts to terminate the ethanol program, but successfully overwhelmed ethanol opponents by extending the ethanol tax incentive for ten years.
In April, Grassley's comprehensive package of energy tax incentives passed out of the Senate Finance Committee, of which Grassley is the chairman. The package included a small ethanol producer credit. The legislation expands the definition of an eligible small ethanol producer so small cooperative producers of ethanol will receive the same tax benefits as large companies. It also clarifies that the tax credit can flow through to the patrons of the cooperatives.