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Posted on  

February 13, 2003

Hagel seeking a large increase in renewable fuels

By Robert Pore

Legislation that would dramatically increase the amount of renewable fuels used in the United States will be introduced today by Sen. Chuck Hagel, R-Neb.

The bill Hagel and Senate Minority Leader Tom Daschle, D-S.D., are sponsoring would expand the use of renewable fuels, such as ethanol from corn and sorghum, as well as biodiesel from soybeans.

The centerpiece of the Daschle-Hagel bill will be a Renewable Fuel Standard (RFS), which would gradually increase the nation's use of renewable fuel from around 1.7 billion gallons annually to 5 billion gallons a year by 2012.

The RFS in this bill is modeled after Hagel's Renewable Fuels for Energy Security Act of 2001.

"The new legislation is not a gallon-by-gallon mandate, and would not force the use of ethanol or biodiesel in places where compliance may be difficult," Hagel said.

He said the bill be a boost to Nebraska's producers and growing ethanol industry.

Nationally, the bill is estimated to replace 66 billion gallons of foreign crude oil; save $34 billion on foreign oil purchases; create more than 200,000 jobs nationwide; and boost U.S. farm income by more than $6 billion a year.

Hagel also said demand for grain (mainly corn, but also sorghum) would grow an average of 1.4 billion bushels. Soybean demand would increase by 144 million bushels.

According to Bob Dinneen, president of the Renewable Fuels Association, the Hagel-Daschle bill would help set the stage for an additional 5 billion gallons of ethanol production annually.

Increasing the volume of renewable fuels as a result of the Hagel-Daschle bill would also have a positive environmental impact.

According to the Renewable Fuels Association, ethanol-blended fuels reduce vehicular emissions of carbon dioxide, methane and other gases that contribute to global warming.

The Argonne National Laboratory has determined that for every gallon of gasoline replaced by ethanol, greenhouse gases are reduced by 30 percent.

Last year, the laboratory reported that ethanol-blended fuels reduced CO2-equivalent greenhouse gas emission by approximately 4.3 million tons in the United States. That reduction is equivalent to removing the annual greenhouse gas emissions of more than 636,000 cars from the road.

This reduction is due, in part, to the "carbon cycle," whereby much of the carbon dioxide released when ethanol-blended fuels are used is reabsorbed by biomass plants, like corn, during growth. These biomass plants provide the feedstocks for ethanol production.

The Hagel-Daschle bill would have a huge impact on Nebraska's already growing ethanol industry, said Todd Sneller, administrator of the Nebraska Ethanol Board.

He said Nebraska has six ethanol plants in operation, with two more under construction and another one that could be reactivated.

Sneller said the potential of those plants could push the state's ethanol production to 425 million to 450 million gallons by the end of the year. That would equate to using 220 million to 240 million bushels. Based on last year's state corn crop, that represents one-quarter of all the corn grown in Nebraska.

Developing more renewable fuel production facilities, such as ethanol plants, would create more of a geographical dispersal across the county and make them less of a potential terrorist target, Sneller said.

Also, having ethanol plants located across the country would save millions of gallons of fuel each year that would be required to ship corn and other renewable fuels crops to other parts of the country for further processing.

"We do not have a lot of oil refineries in the United States and a terrorist attack on one of those refineries could have a catastrophic impact, disrupting not only the transportation sector, but the entire economy of this country," Sneller said.

Also, he said targeting more corn to domestic energy production will help offset lower corn exports.

According to a recent report by the U.S. Department of Agriculture, corn used by ethanol producers offset a 25-million-bushel reduction in exports last month.

With world corn production expected to be on the rise, especially with bigger corn crops in Argentina and Ukraine, that could mean larger exports from those countries and reduced U.S. exports.

"To cushion the economic impact from massive reduction in exports, we can help offset that by developing more domestic industrial uses for corn, such as ethanol production," Sneller said.



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