Harkin brings back ethanol infrastructure bill in the midst of positive energy policy steps

Written by Jonathan Eisenthal

Sen. Tom Harkin, D-Iowa, is hopeful that a bill calling for the kind of infrastructure needed to utilize the growing production of biofuels can pass in this Congress, though it stalled during the previous session.

The bill calls for a graduated increase in blender pumps, reaching 50 percent of all pumps owned by major gasoline distributors, and offers a 50 percent cost share for the installation of these pumps. Funding would begin in 2012 at $50 million and rise to $350 million by 2016. The Harkin bill, co-authored by Senators Amy Klobuchar, Al Franken of Minnesota and Tim Johnson, South Dakota, would also require that half of all cars manufactured in the US come with flexible fuel systems as standard equipment by 2015, and then after 2016, the percentage rises to 90 percent.

“We consider this a jobs bill–supporting the continued growth of renewable fuels, on the farm and beyond the farm, will create more high-paying jobs that won’t migrate beyond our borders than any other initiative to support the US economy,” said Greg Schwarz, a farmer in Le Sueur, Minnesota, and president of Minnesota Corn Growers Association.

In 2009 the ethanol industry produced 10.6 billion gallons of biofuel, which supported 400,000 jobs across a broad spectrum of economic sectors, according to the Renewable Fuels Association. Current energy law provides for renewable transportation energy to grow to 36 billion gallons by 2022. Estimates vary, but clearly this expansion would support hundreds of thousands of new jobs.

“This is where the rubber hits the road–we have 106 new members of the US House of Representatives this year and everyone who supports renewable fuels has to band together and make sure they get the straight facts on ethanol, so we can win their support for expanding ethanol infrastructure,” said Schwarz.

In his January 25th State of the Union Address, Pres. Barack Obama said that now is “our generation’s Sputnik moment” referring to the shock felt by America at being outcompeted in the global space race in the mid-20th Century. Today’s shock is over the loss of jobs and competitiveness in the global economy. He made a pitch for America “winning tomorrow” through strategic enhancement of the country’s competitiveness.

Ethanol and biodiesel earned this mention: “With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have 1 million electric vehicles on the road by 2015.”

Obama mentioned stripping away incentives paid to the oil and gas industry, estimated to reach $32.9 billion annually by 2013, to pay for clean energy innovation.

Said Obama, “I don’t know if you’ve noticed, but (the oil and gas industries are) doing just fine on their own. So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.”

The most recent federal measure was the January 21 announcement by USDA of $405 million in guaranteed loans, to go to three next generation ethanol plants. The package includes a $250 million loan guarantee for Coskata, Inc., an Alabama-based cellulosic ethanol company that will produce ethanol from woody biomass. It is the largest loan guarantee in the history of the USDA biorefinery program.

The recent EPA decision to grant a waiver and allow the use of E15 fuel in all conventional gasoline engine cars built 2001 and after will help create room for cellulose ethanol in the marketplace. According to RFA estimates, this ruling covers 62 percent of America’s fleet of 230 million cars. Full utilization of E15 in all eligible vehicles would bring national ethanol consumption up to 17.5 billion gallons of biofuel.

The Harkin bill also includes loan guarantees to cover 80 percent of the cost of ethanol pipelines that would bring ethanol from Midwest producers to major fuel markets.

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