RFA Pushes Ethanol Agenda

Association urges end to oil industry tax breaks in letter to President Obama.

American ethanol production is creating jobs, energizing rural economies, reducing oil imports, and helping all consumers save money at the pump emphasized the Renewable Fuels Association said in a letter to President Obama as he prepares for the State of Union address on Jan. 24.

“While renewable energy discussions have been few and far between on Capitol Hill and in the election this year, the upcoming State of the Union address offers the unique opportunity to remind lawmakers and the American public of the value of a strong domestic renewable fuel industry,” wrote RFA President and CEO Bob Dinneen. “The story of renewable fuels in America is good one. Domestic production of ethanol, the largest and most viable biofuel available today, was nearly 14 billion gallons in 2011. That represents ten percent of the nation’s gasoline supply. Even more impressively, ethanol represents one-quarter of all motor fuel used in gasoline engines that is produced from domestic sources.”

Dinneen underscored the value of domestic ethanol production in job creation, stating that “job creation estimates for 2011 as a result of U.S. ethanol production suggest close to 100,000 direct jobs and an additional 350,000 indirect and induced jobs supported by America’s ethanol producers.”

Additionally, Dinneen seized upon the downturn in America’s use of imported oil and the direct impact the rise in domestic ethanol production has played in reversing the trend of a growing dependence on imported oil.

“As you know, for the first time since 1997, net oil imports account for less than 50 percent of total U.S. demand for crude oil,” wrote Dinneen. “That is down significantly from recent years when nearly two out of three barrels of oil used in the U.S. were sourced from other nations. …with ten percent of America’s gasoline supply now comprised of a domestic renewable fuel, American ethanol is meaningfully and directly helping to make the dangerous threats of petrodictators to disrupt vital oil shipping lanes less impactful. This is not only saving Americans money, but it is also a way to help mitigate the need for U.S. military action to protect the flow of oil.”

Dinneen urged President Obama to build on his record of success in support of domestic ethanol production to push for four important policy directions.

First, ensuring the integrity and intent of the Renewable Fuel Standard is paramount to both existing ethanol producers and companies developing new technologies. “This policy is the only nationwide domestic energy strategy that is directly reducing imports of oil while also creating permanent U.S. jobs and economic opportunities. Moreover, it serves as the policy foundation for investment in and commercialization of advanced and cellulosic ethanol technologies,” wrote Dinneen.

Second, extending key tax provisions for cellulosic ethanol production will be key to commercializing these technologies. “Extensions of both the Production Tax Credit (PTC) for cellulosic ethanol and the Accelerated Depreciation Allowance for cellulosic biorefineries are two polices that are needed to spur continued investment and create some semblance of balance and parity within energy tax policy that is lacking today.”

Third, the continued focus of the Obama Administration on ethanol and renewable fuel infrastructure and new production technologies will be critical to breaking the fossil fuel monopoly on the nation’s fuel supply. Specifically, Dinneen commended the work of Agriculture Secretary Tom Vilsack noting, “[t]he Department of Agriculture has made wise and fruitful investments in next generation ethanol technologies, farming practices and technologies to supply a growing array of biofuel feedstocks, and ethanol fueling infrastructure that is needed to expand the market opportunity for domestically-sourced ethanol and other biofuels.”

Fourth, a level playing field is desperately needed in order for more domestic renewable fuels like ethanol to compete in the market. Dinneen encouraged President Obama to continue his push to eliminate oil industry tax breaks.

The entire RFA letter can be read here.

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