"There are few issues more important right now than America's energy needs and the need to reduce our dangerous dependence on foreign oil and expand our use of alternative sources of energy," 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."
Iowa's senior senator worked with Sen. Chuck Hagel of Nebraska to secure bipartisan backing for the standard, which calls for using 5 billion gallons of renewable fuels by 2010. Earlier this week, the renewable fuels standard was folded into the Energy Policy Act in a substitute amendment filed by Senate Majority Leader Tom Daschle.
"Another leader who deserves a lot of credit for this breakthrough is President Bush," Grassley said. "He's the most pro-ethanol president we've ever had in the White House. He talks about the value and importance of ethanol, and he backs his words up with deeds. He deserves a lot of credit for bringing together the diverse group of industry partners who have endorsed this renewable fuels standard."
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, decrease dependence on Saddam Hussein for oil, and expand markets for agricultural products," Grassley said.
Last year, ethanol plants produced a record 1.8 billion gallons of fuel, displacing more than 3 billion gallons of foreign crude oil and using 700 million bushels of excess grain. Today's ethanol industry supports nearly 200,000 jobs nationwide.
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, he led the successful effort to extend the ethanol tax credit for ten years.
Last month, he steered through the Finance Committee a bipartisan package of tax incentives to help further develop ethanol, biodiesel, biomass and wind energy. The pending legislation would make sure small cooperative producers of ethanol can receive the same tax benefits as large producers. This is important because at least eight of the ethanol plants in Iowa that are either operating or under construction are farmer-owned. The legislation also provides an income tax credit and excise tax rate reduction for biodiesel fuel mixtures. Iowa is the nation's largest producer of soybeans and home to two biodiesel plants.
Grassley is the Ranking Member of the tax-writing Senate Finance Committee.