As the summer sun beckons the leafy green corn stalks to reach higher in the sky, Iowa farmers are ready and willing to respond to a ruling issued by the Bush administration’s Environmental Protection Agency. After farmers suffered two costly years of delay by the Clinton administration, President Bush moved early in his administration and issued the pro-ethanol announcement in early June. Immediately, Iowa’s corn producers, rural investors and grain processors shifted into high gear to make the necessary preparations to supply the nation ’s most populous state with clean-burning, corn-based ethanol.
As a leading advocate for ethanol and alternative, renewable energy sources, I’ve been crusading in Washington for years to champion the many benefits of ethanol. Three years ago, I successfully won a 10-year extension for the tax incentives that promote the sale of ethanol at the pump. Since then, I’ve been vigilant to track aggressive efforts by the petroleum industry to weaken the federal ethanol program. Recently, Big Oil led an effort to shut down the sale of ethanol in the most populous state in the country.
California had requested a waiver to the 1990 Clean Air Act that requires urban-area gas stations to sell gasoline specially formulated to reduce smog. In congested areas across the country, major metropolitan areas must sell what’s called reformulated gasoline at the pump. The oxygenated, cleaner-burning fuel is blended primarily with either ethanol or a petroleum-based additive to meet these federal standards.
But in recent years, states using the petroleum-based additive, methyl tertiary butyl ether (MTBE) have pulled the product from the pumps because it is poisoning groundwater supplies. But instead of switching over to the ethanol product, California sought a waiver from the reformulated gasoline program. As a result of President Bush’s decision, California must continue to participate in the clean gas program.
Already hundreds of Iowa farmers are pooling their resources to break ground on new ethanol processing facilities. And in late June, a group of farmers in Northwest Iowa received more good news from the Bush administration. The group has qualified for a $12.5 million Department of Agriculture loan to help construct an 18 million gallon per year production facility in Galva. The plant is expected to start processing ethanol in January 2002. Previously, the 416 members of the cooperative had contributed $8.5 million of equity capital toward the project.
In addition, more ethanol processing facilities are making it from the drawing board to groundbreaking ceremonies across the state. At least 10 farmer-owned ethanol plants currently are being developed or built in Iowa. There’s good reason for optimism in the countryside where corn is king. According to the Renewable Fuels Association, California gas stations will need about 580-million gallons of ethanol by 2003. The surge in demand for corn will increase the value of U.S. corn, boosting corn prices by at least 12 cents a bushel. All told, the EPA’s decision may lead to an extra $1 billion in farmers’ pockets every year.
Making California comply with the standards enacted by the Clean Air Act is a victory for consumers, farmers, the environment, U.S. energy independence, the rural economy and our national security. As I’ve said many times in the past, ethanol is good, good, good, good.
Despite the big time pressures of Big Oil and an electoral heavyweight like California, I’m pleased the Bush administration made the right decision. It shows this administration can put principles, public policy and sound science squarely above politics. Now Iowa and other Corn Belt states in the nation’s mid-section have a golden opportunity to fuel the Golden State in the 21st century.