Biodiesel supporters ask Congress to extend incentives

Biodiesel supporters ask Congress to extend incentives
AgriNews - LaSalle,IL,USA
ST. LOUIS — Biodiesel proponents are urging Congress to extend current programs that will continue to bolster the soy-based energy source. ...

 ST. LOUIS — Biodiesel proponents are urging Congress to extend current programs that will continue to bolster the soy-based energy source.
The American Soybean Association recently hosted a teleconference to emphasize the need for legislators to extend the biodiesel tax incentive and the small producer credit, as well as the continuation of the U.S. Department of Agriculture’s Commodity Credit Corp. Bioenergy Program.
The tax incentive and small producer credit programs expire at the end of 2008, and the CCC Bioenergy Program terminates at the end of this fiscal year.
ASA President Bob Metz, a West Browns Valley, S.D., soybean producer, said the tax incentive and small producer program are “two key government programs that have fueled biodiesel’s growth.”
“The importance of these two programs cannot be overemphasized,” he said.
U.S. Rep. Collin Peterson, D-Minn., whose own state was the early champions of ethanol legislation in the 1970s and are doing the same with biodiesel, added: “I think it’s very important that the we get the CCC Bioenergy Program and these tax credits extended because one of the issues that we had in ethanol, and we’re having in biodiesel, is when you’re trying to finance these plants, it makes it more difficult if you don’t have the credits in there for a longer enough period of time. It makes bankers more reluctant to step up to the plate.”
“Because biodiesel needs these programs to recognize its potential as a renewable fuel,” Metz explained, “ASA offers a three-point plan designed to enable biodiesel producers to manufacture greater quantities of fuel.”
That plan asks Congress to include in any energy package legislation to extend the three programs.
“By taking these actions, we estimate on-road diesel supplies could be increased by 2 percent by 2015,” Metz said.
“Each gallon of domestically produced biodiesel represents an expansion of distillate supplies, additional refinery capacity and is a direct replacement for imported refined diesel fuel. Boosting available fuel supplies will also have a positive impact on fuel prices to consumers.”
John Campbell, senior vice president of industrial products and government affairs for Ag Processing Inc., who also participated in the teleconference, said: “As a biodiesel pioneer with plants to expand production, AGP wholeheartedly supports ASA and its biodiesel agenda in Washington. We look forward to working along side ASA as it pushes to extend the biodiesel tax incentive beyond 2008.”
AGP was the first company to construct a biodiesel plant in the United States The Sergeant Bluff, Iowa, facility was constructed in 1996 and continues to operate.
Since that time, AGP facilities have expanded and will soon be producing 58 million gallons of biodiesel fuel annually.
“Biodiesel is an environmentally sound alternative to petroleum diesel, and it is made here in the United States using U.S.-grown soybeans on American soil,” Metz said.
“It’s a top-notch product that lessens dependence on foreign oil, improves the quality of the air we breathe, and stimulates the rural economies where it’s produced.
“The domestic biodiesel industry is expanding. Production of the fuel has grown from 2 million gallons in 2000 to more than 150 million gallons this year if projections hold true.”
“With each fill up, Americans are reminded of our energy challenges. While there are no simple answers to this problem, one can safely conclude that our country needs more fuel, and that’s a need soybean farmers are ready to fill with the production of more soybean-based biodiesel,” he continued.
Using data from the CCC Biodiesel Program, Campbell noted the industry size doubled from 2004 to 2005 and doubled again from 2005 to 2006.
Based on announcements of future plant construction, “we figure there’s about 100 million gallons of dedicated biodiesel capacity, another 50 million gallons of swing capacity in the oleo-chemical and petro-chemical business, and about 115 million gallons (in capacity) under construction. So, we have about 265 million gallons in place or under construction,” Campbell said.
“What that means is within the next 12 to 18 months we should have the capacity to convert about 2 billion pounds of soybean oil and other fats into biodiesel,” he explained, adding the market will be able to handle whatever is produced since biodiesel represents a small portion of the diesel fuel business.
“Biodiesel is not a hot an item right now as ethanol, but I think it will be,” Peterson said. “From what I know, with the sulfur phase-out that’s coming, we’re going to actually create quite a demand for biodiesel that I hope we’re going to be able to be in place to fulfill.
“We don’t want to get into a situation where people will start talking about importing like they are with ethanol because that’s not the direction that we want to go.
“I think biodiesel is an easier process – not quite as expensive to build the plants as with ethanol, and it just make sense.”
The congressman said he believes one of the reasons for the focus on ethanol is “it has become the most profitable agricultural endeavor in my district, and that has not gone unnoticed on Wall Street with Bill Gates and other people like that.”
“Even foreign money has started to come in here from the Middle East to invest in ethanol plants,” he said.
Brazil and several European nations are far ahead of the United States in biodiesel use. Peterson was asked if he believed this country is being shortsighted on this issues.
“Clearly, Congress is generally shortsighted. We generally focus on what the crisis is at the moment, and we don’t look at the long run very often,” he answered.
“I was in Europe a couple of months ago, and (they) are way ahead of us on biodiesel just like Brazil is on ethanol. Europe has B-100 pumps. We see what’s happening. We see what the potential is. We have some catching up to do.
“All we can do is keep plugging away, doing things like we’re doing here today to try to get the word out to the public that this is another opportunity for us to get off of foreign oil and for us to create jobs and economic development in rural areas.”