Sens. Chuck Hagel (R-NE) and Tim Johnson (D-SD) letter to Vice President Dick Cheney
May 16, 2001

Dear Mr. Vice President:

We are extremely pleased with the priority being given by the Administration to energy issues and we look forward to the announcement of the Energy Task Force Report. We are writing to convey our strong view that the Administration's energy policy recommendations must include a growing role for renewable fuels such as biodiesel and ethanol.

As you have stated, our rising dependence on imported petroleum has become a storm cloud over the economy. The failure to address America's energy needs has jeopardized our energy security, economy and national security. To meet our future energy needs, all sources of fuel and energy must be thoroughly explored and utilized.

Renewable fuels, such as biodiesel and ethanol, are increasingly important sources of transportation fuel in the country. Today, ethanol production exceeds two billion gallons annually - about 130,000 barrels per day. As farmer?owned cooperatives continue to invest in value?added processing, ethanol production will rise. Six new plants and thirty-four expansions, slated for completion this year, will increase this capacity by more than 320 million gallons annually or 21,000 barrels per day. Additional construction over the next two years will add another one billion gallons of ethanol production.

Ethanol-blended gasoline is sold in every state in the country, particularly in areas where it is used by refiners as an oxygenate to comply with Clean Air Act requirements. Ethanol's high octane and clean air benefits make it a logical choice for refiners in addressing the production constraints caused by numerous environmental challenges, including low-sulfur gasoline, the phase?out of MTBE and toxic performance standards. Similarly, biodiesel offers one of the best available alternatives for heavy?duty applications because it has high cetane, lubricity, and BTU content, yet contains no sulfur or aromatics. Since biodiesel is compatible with existing diesel engine technology and infrastructure, it can be used in a number of beneficial ways, including as an effective lubricity additive while low?sulfur diesel regulations are implemented.

Increasing the production and use of ethanol and biodiesel will promote a number of energy, environmental and economic public policy goals. First, it will decrease the need for imported petroleum products, reduce the stress on our refineries and reduce consumer gasoline costs. Second, it will help improve air quality across the country by reducing carbon monoxide, hydrocarbon, nitrogen oxide and toxic emissions. Third, the increased demand for grain used in the production of ethanol and biodiesel will provide an important economic stimulus to rural America. Finally, because ethanol and biodiesel are produced from renewable resources, they are the most efficient means of reducing greenhouse gas emissions from motor fuels in the near term.

In your speech on energy issues to the Associated Press last week, you indicated we could reasonably expect renewable power generation to meet three times the share of energy needs it meets today. The same is true for renewable fuels. Ethanol and biodiesel could meet 3% of the nation's motor fuel market within ten years - providing energy, environmental and economic benefits for the nation. A 3% market share for ethanol and biodiesel would displace about 9 billion gallons of gasoline annually or between 500,000 and 600,000 barrels of crude oil each day.

Mr. Vice President, we look forward to working with you over the next several months to develop a comprehensive energy policy that promotes domestic energy production from all of this country's vast natural resources, including the largely untapped energy produced by America's farmers.

Sincerely,

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ST. LOUIS OFFICE

WASHINGTON D.C. OFFICE