As anxiety mounts about the war in Iraq and a stalled economic recovery here at home, many Iowans are keeping close tabs on gas prices and energy supplies. The connection is unavoidable. Indeed America’s energy security rests in large measure on U.S. foreign policy and diplomatic ties with OPEC-member nations in the Middle East. Our troops are serving overseas to protect our national security interests and liberate the Iraqi people from a dangerous dictator. Arguably, a swift economic recovery and sustained energy security also are linked to success in the Persian Gulf conflict.
It’s time to put the brakes on our dependence on foreign oil and accelerate efforts to boost supply and demand for domestic energy. That’s why I’m revving up my long-time efforts in Washington to improve U.S. energy security by promoting alternative, renewable sources of energy and increase energy conservation and efficiency.
Since the energy crisis in the 1970s, the federal government has used financial incentives, regulatory requirements and other programs to expand alternative sources of homegrown energy.
As a farm-state lawmaker, I understand renewable energy not only helps curb pollution and boost U.S. energy independence, it helps create jobs in Iowa. That’s because Iowa’s agricultural bounty not only feeds the world, it can help supply energy to America.
According to the Iowa Department of Natural Resources, Iowa has the potential wind energy capacity to produce 4.8 times more power than it consumes, as an example.
Whether it’s harnessing wind power, blending corn-based ethanol with gasoline, harvesting switch grass, turning livestock waste into electricity or processing soybeans into biodiesel, Iowa has the ability to produce, process, ship and supply energy to help heat and cool our homes, run our factories, provide power to our schools, fuel America’s transportation fleet and drive economic development in rural areas.
It makes sense to pursue energy production in the Midwest, far from the instability and hostility rooted in the Middle East. Volatility in the energy markets can preview an economic domino effect, including price increases on goods and services. This affects consumer confidence, purchasing power and investment decisions.
Since the 1950s, the U.S. has increased its reliance on foreign petroleum. According to the Energy Information Administration, net imports of petroleum products in 1973 made up 35 percent of U.S. consumption. By 2001, it had grown to 54 percent and is projected to increase to 64 percent by 2020.
My bipartisan Energy Tax Incentives Act of 2003 builds upon my efforts to advance Iowa’s development of renewable fuels and alternative energy. In 1992 I kicked off my renewable energy crusade with the first-ever wind-energy tax credit. In 1997, I won an extension of the ethanol excise tax exemption for 10 years. These tax policy incentives helped create a launching pad for investors and farmers to build wind farms and ethanol processing facilities in Iowa.
Now I’m working to secure policies that help Iowa’s homegrown, alternative energy business to continue flourishing and pave the way for renewable fuels of the future. The $15.5 billion energy plan approved by the Senate Finance Committee in April includes:
U an extension of the wind-energy tax credit
U an extension of the biomass tax credit
U an improved ethanol tax credit, reducing the dependence upon the current highway
excise tax exemption
U an income tax credit and excise tax rate reduction for biodiesel fuel mixtures
U a modification to allow ethanol cooperatives to benefit from the small producers credit
U a production tax credit for electricity generated from livestock waste
U a tax credit for the manufacture and use of super energy-efficient home appliances
My proposal to restructure the ethanol tax incentive would ensure the 18.4 cents per gallon excise tax would be paid into the Highway Trust Fund on every gallon of gas or ethanol-blended fuel. To keep in place the tax advantage that helps ethanol compete with and displace imported petroleum, my bill would shift the tax incentive from a tax exemption to a tax credit. Just like renewable fuels, keeping our roads and bridges safe for travel and commerce lies in the national interest. This technical change in the federal tax code would ensure renewable fuels contribute their equal share to road maintenance and new highway construction and still receive favorable tax incentives.
Policymakers need to look ahead and envision America’s energy needs in the 21st century. While it is critical to encourage conservation, efficiency and production of domestic, traditional energy sources, we can’t overlook the potential windfall for America that alternative, renewable energy holds. Whether you consider national, economic or energy security, Iowa has the opportunity to reap the advantages of becoming an energy supplier for America.