Mr. Chairman, I would like to take this opportunity to thank you for having the foresight to schedule today's hearing on the very important topic of converting our vast agriculture biomass resource to transportation fuel and other forms of energy. I welcome our witnesses, especially Tom Richard from Iowa State.
We have all heard about the amazing biotech cures for many diseases, and we know about the new biotech crops, but we have not heard much about the newest kind of biotechnology-industrial biotech. Industrial biotechnology involves using enzymes to convert crops and crop residues to a host of products, including ethanol and corn-based plastics.
Most folks don't know it but this hearing is of particular importance because there is currently an international technological race underway. Companies from Europe, Canada, the US and Japan are racing to be the first to improve on, and commercialize, the biotech enzymes that are used to turn corn stover, wheat straw, and other crop residues into the sugars that can be fermented to ethanol.
On April 22, 2004 a Canadian enzyme company called IOGEN announced that they had produced the world's first bio-ethanol and delivered it to the commercial fuel market. Two weeks ago today, IOGEN produced over 1,300 gallons of ethanol using wheat straw as the feedstock instead of grain and delivered it to a gasoline refinery to be blended into motor fuel. They operate a pilot plant in Canada that will produce over 260,000 gallons a year of bio-ethanol and they would like to build a large scale commercial biorefinery in Idaho.
This announcement went little noticed in the U.S. It is, however, a landmark event that signals several important facts. First of all it means that industrial biotechnology is now available to commercially convert the vast US biomass resource into ethanol. Commodity farm groups, federal energy program officers, and Congress should sit up and take note of this breakthrough. In effect, it means farmers can now harvest two crops from every field-a grain crop and a biomass crop.
Second, I would note that it was a Canadian company, not a US company, that made this announcement. I congratulate IOGEN for this achievement, but I am troubled that the US might be losing the technology race to develop new biorefinery technologies.
This technology is important to me because in Iowa we have a huge corn stover biomass resource. Studies have shown that if we build 10 biorefineries in Iowa to make ethanol from corn stover we could create 22,000 new jobs. If we build 100 biorefineries we could create over 200,000 new jobs in rural areas where they are needed most.
Companies with operations in Iowa, like Genencor and DuPont, have pioneered the biorefinery concept. They are part of a group called BIOWA that is studying how we can form the economic and technological infrastructure to build a biobased economy in Iowa. Biorefineries mean we can grow our own fuel, create new jobs and help protect the environment. Biorefinery development and the use of industrial biotechnology could produce economic activity in the billions of dollars and Iowa is the leading state in exploring these opportunities.
The Energy Future Coalition is a bi-partisan group that has been developing new bioenergy policy recommendations. We have two distinguished witnesses here today who have been active in that group, Mr. Gray and Mr. Woolsey. This coalition has a Bioenergy Working Group and they have developed some novel approaches to bioenergy policy that includes a recommendation for the Department of Defense to fund a commercial scale biorefinery competition to see which technologies are best at converting corn stover to ethanol.
We still have problems to overcome before we see widespread construction of biorefineries in my state. We need to develop soil models and guidelines for farmers that will tell them how much stover they can send to biorefineries without reducing the productivity of the soil. We need to work with equipment manufacturers to make sure they design new one pass harvesting equipment to make stover harvesting and utilization economical. We need more research to keep improving on the enzymes that can convert biomass to ethanol and bio-plastics. And most importantly, we need to devise federal and state funding mechanisms to help finance the very expensive construction of biorefineries all around the country. If you look at how much money we have put into the clean coal program and how much we have put into biorefinery development you can see that we have not even begun to nurture this emerging industry. But all of these obstacles can be overcome if we work together.
In terms of rural development and energy security it might be time we consider the establishment of a biorefinery initiative, similar to the clean coal initiative. The corn fields of today are already producing food and ethanol. With the right policies and with the help of industrial biotechnology we can better utilize the crops we are currently producing and significantly improve energy output.
Mr. Chairman, I this hearing is very timely. Thank you again for the opportunity to discuss these important agricultural and energy issues.