Pro-Ethanol Legislation Introduced in the Senate

Sens. Amy Klobuchar (D-Minn.) and Tim Johnson (D-S.D.) introduced legislation last week to provide more support to the biofuel industry. This would counter a number of bills introduced recently intending curb biofuel incentives (here, here). Fortunately, support for this kind of bill does not seem to be in the pipeline, so it must mostly be for show.

The “Securing America’s Future with Energy and Sustainable Technologies Act” (SAFEST) is bold. Rather than picking one or two things the ethanol industry was interested in, it throws them everything they’ve ever dreamed of.

Let’s look at a few provisions:

It amends the definition of “advanced biofuel” to include corn starch-derived ethanol.

This would allow the corn ethanol industry access to a much larger share of the Renewable Fuel Standard, which is scheduled to increase from 9 billion gallons to 32 billion gallons by 2022. This would be one of the more damaging aspects of the legislation.

It also supports a mandate for automakers to ramp up the production of “fuel choice-enabling” vehicles to 100 percent by model year 2021. This includes FFVs, biodiesel-powered vehicles, hydrogen fuel cell technologies and hybrid vehicles.

This will drive up the cost of vehicle production. It will conflict with efficiency mandates as automobile manufacturer’s get a credit for CAFE standards when they produce E85. It will also ensure that E85 sticks around for much longer, and not allow the market to effectively test new modes of automobile transporation.

It attempts to eliminate liability concerns related to the use of ethanol in combustion engines.

Hmm. I thought E15 and higher blends were completely safe in all of the testing the DoE has done. Why are they concerned with liability?

The blenders credit would be shifted to a credit for producers and would be reduced from 45 cents per gallon to 20 cents per gallon beginning in 2012. The credit is then phased out slowly, at a reduction rate of 5 cents per year, until it zeros out in 2016. The $1.01-per-gallon credit for cellulosic biofuels is retained as is a 10-cent-per-gallon small producer credit for ethanol facilities with capacities no greater than 60 MMgy.

This is until they attempt to pass more legislation in 2015 giving them “just a few more years” of the tax credit, as the industry is “still maturing” and American oil imports will have inevitably continued to rise.

There are many more provisions in the link here.

Grassley also completed some ethanol-penance. He had recently noted that he would be unable to vote against the Republican CR amendments despite anti-ethanol provisions in them. In his recent speech, he made it clear that he will defend ethanol as long as it helps his career forever.