NCGA Notes Introduction of American Fuels Act (3-24-06)

The National Corn Growers Association (NCGA) is pleased with action taken last week by Sens. Barack Obama (D-Ill.) and Richard Lugar (R-Ind.) in stepping forward to advance renewable fuels, such as ethanol, as part of the solution to reduce U.S. dependence on foreign oil.

The senators introduced S. 2446, The American Fuels Act of 2006, which is comprehensive bipartisan energy legislation that advocates use of renewable fuel technologies to greatly decrease America's dependence on foreign oil.

“NCGA strongly believes that renewable fuels such as ethanol can and will be part of the solution to lessening our dependence on foreign sources of oil,” said NCGA Ethanol Committee Chairman Bruce Noel. “In President George W. Bush’s State of the Union address, he called for a 20 percent reduction of Middle East oil by 2025. Ethanol from corn can help to meet that goal well before 2025.”

According to the Energy Information Administration and a recent economic analysis prepared for the Renewable Fuels Association by LECG, LLC, imports account for 65 percent of U.S. crude oil supplies, and oil imports are the largest component of the expanding U.S. trade deficit. The production of 4 billion gallons of ethanol means that the U.S. imported 170 million fewer barrels of oil in 2005, valued at $8.7 billion, to meet the same demand levels.

According to Obama and Lugar, S. 2446 would take the following steps to reducing America's dependence on foreign oil.

The bill would:

* Spur investment in renewable fuels by increasing the production of cellulosic biomass ethanol (CBE) to 250 million gallons by 2012;

* Create a Renewable Diesel Standard that will require 2 billion gallons of renewable diesel fuel be mixed into the 40 billion gallon annual national diesel pool by 2015;

* Increase consumer demand for renewable fuels by providing a short-term, 35 cents per gallon tax credit for E85 fuel and by providing automakers with a $100 tax credit for every E85-capable flexible fuel vehicle (FFV) produced;

* Require the U.S. government to increase access to renewable fuels by allowing public access to alternative fueling stations located on federal government property and by requiring that only clean buses be eligible for federal cost sharing;

* Establish a Department of Defense "fly-off competition" that would encourage private sector companies to compete to find the most energy efficient renewable fuels for defense purposes;

In addition, the bill would estable a Director of Energy Security, who would serve as the principal advisor to the president, the National Security Council, the National Economic Council and the Homeland Security Council on renewable energy use.