Energy Security Act: ASA tells biodiesel benefits to Congress

The American Soybean Association wants to make sure biodiesel has its place among the Bush administration's vision for “renewable fuels.” ASA has joined grain producer groups and ethanol/biodiesel suppliers on Capitol Hill in the push for passage of the Renewable Fuels for Energy Security Act now before Congress.

The legislation sets a federal goal for increased national use of renewable fuels, such as biodiesel and ethanol. Under the measure, renewable fuels would account for 3 percent of highway transportation fuels by 2011 and 5 percent by 2016. Companion proposals have been submitted in both the House and Senate.

The proposed legislation would allow flexible approaches to comply with program goals in ways that best fit within the operations of fuel providers, biodiesel proponents say.

ASA Executive Committee member Ron Heck told the House Small Business Subcommittee that the House version “provides achievable goals for both biodiesel and ethanol while helping to decrease our dependency on imported petroleum.”

Heck, who raises soybeans and corn near Perry, Iowa, testified that the measure “is a bold and innovative step in moving our country to homegrown energy sources.”

He presented the sub-panel with results of a new USDA study that he said shows biodiesel production can have significant economic benefits for farmer income, rural communities and the overall U.S. trade balance.

The study, he said, reports an increase of 200 million gallons of biodiesel or other soy-based bioproducts per year would boost total crop cash receipts by $5.2 billion cumulative by 2010, resulting in an average net farm income increase of $300 million per year. The price for a bushel of soybeans, according to the report, would rise by as much as 17 cents annually during the 10-year period.

The study was based on the effect of increasing soybean oil demand by 1.5 billion pounds per year between 2001 and 2010. That is the equivalent of 200 million gallons of biodiesel production a year.

The 1.5 billion pound annual average increase in soybean oil demand would induce an increase of over 13,000 jobs, the report projected. New jobs would be created in the farm sector, food processing, manufacturing, and in the service sectors.

Renewable fuels proposals pending in the House were introduced Rep. John Thune, R-S.D. Sens. Chuck Hagel, R-Neb. Sen. Tim Johnson, D-S.D., sponsors the Senate measure.

John Campbell, vice president of Ag Processing Inc., a farmer-owned cooperative, told the Senate Energy Committee that even modest levels of alternative and replacement fuel use are providing energy security benefits.

“If the United States were to achieve the 10 percent replacement fuel goal of the Energy Policy Act of 1992, oil prices could be reduced by approximately $3 per barrel,” he said. “At current U.S. oil consumption levels of 6.8 billion barrels, this level of alliterative/replacement fuel use results in a savings of approximately $20 billion on an annual basis.”

Campbell also stressed that companies need Congress to integrate renewable fuels into a national energy strategy to give the private sector the confidence to make further investments.

“Biodiesel needs a consumer incentive to help level the playing field in a marketplace that is heavily lilted toward oil and gas,” Campbell said. “We are not anti-oil. We are pro-oil. We just want to make sure there is room for renewables in an already distorted energy market.”

Gene Gebolys, president of World Energy Alternatives, also testifying before the Senate Energy Committee, said biodiesel brings tremendous environmental benefits to the public. He cited a recent Environmental Protection Agency study that found more than 75 percent of all cancer risk associated with outdoor air contaminates relates directly to diesel exhaust.

Meanwhile, biodiesel exhaust has been found to be completely non-toxic, he said.

Biodiesel, according to the EPA study, performs comparably to diesel with similar octane and BTU content. It is the best of all fuels to use, handle and store, EPA claims.

More than 100 major vehicle fleets use biodiesel, including transit authorities, public utilities, government agencies and school districts. The fuel has been proven successful in more than 40 million road miles and countless off-road, marine, boiler and generator applications.

Biodiesel is listed with the Department of Energy as an alternative fuel and is registered with the EPA as both a fuel and fuel additive. Biodiesel contains no petroleum but can be blended with diesel at any level.

It is the only alternative fuel to have passed the rigorous Health Effects testing requirements of the Clean Air Act. The results, submitted to the EPA in 2000, show biodiesel is non-toxic, biodegradable and free of sulfur. Emissions it reduces include carbon monoxide, unburned hydrocarbons and particulate matter.

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