Nussle introduces renewable energy bill

Nussle introduces renewable energy bill

Wednesday, June 30, 2004

By JOE HEITZ, Courier/Medill News Service

WASHINGTON --- U.S. Rep. Jim Nussle, R-Iowa, introduced a bill in Congress last week to encourage use of renewable energy sources as a way to decrease America's dependence on foreign oil.

"The focus is on renewable energy," said Nussle spokeswoman Kim Deti. "This isn't a bill that could provide short-term solutions, but it could help meet our long-term needs."

The bill would require a significant increase in the use of renewable sources --- such as ethanol, a grain alcohol fuel additive made from corn, and biodiesel --- in fuel. Nussle's proposed Renewable Fuel Standard would call for usage of such fuel to increase from 3.1 billion gallons next year to 5 billion gallons in 2012. The bill, co-sponsored by Rep. Tom Latham, R-Iowa, would also require vehicles used by federal agencies to use ethanol or biodiesel fuels whenever possible.

Nussle's bill would provide several tax credits to small ethanol producers and manufacturers of energy-efficient appliances. It also calls for the permanent extension and expansion of tax credits for electricity produced from wind, ethanol, biodiesel and manure.

The bill would also ban Methyl Tertiary Butyl Ether. MTBE is an additive that helps fuel burn cleaner, but critics say it can contaminate groundwater. According to the Environmental Protection Agency, 17 states have already banned MTBE.

The proposal could ultimately help consumers avoid high gas prices at the pump by weaning America from its dependency on foreign oil, Deti said.

"Setting the stage for America to take care of its own needs down the road is the only way to ensure our families will be less vulnerable to the decisions of oil traders around the world," Nussle said in a statement. "How will it be possible to remain safe and strong as a nation if we don't take action?"

Previous attempts to pass similar legislation have failed to pass in both houses of Congress.

"For several years, people have been trying to do a really large, comprehensive energy bill," Deti said. "He's been supportive of those, but has been frustrated with the lack of leadership."

Deti said attempts to ban MTBE nationally have been a stumbling block for previous renewable-energy legislation, but wouldn't speculate on whether the inclusion of a ban in the current proposal would hurt its chances.

Currently, ethanol is blended into about one-third of the U.S. fuel supply, according to the American Coalition for Ethanol.

"They're using every single drop of ethanol they're producing right now," said ACE spokeswoman Kristin Brekke. "Each gallon represents a gallon produced here and one we don't have to import."

Refineries located across 20 states produced 2.8 billion gallons of ethanol in 2003. This year, their output is expected to reach 3.4 billion gallons. Additionally, ACE predicted that raising ethanol production to 5 billion gallons by 2012 --- as required in Nussle's bill --- would require 2 billion bushels more corn.

Iowa taps about 10 percent of its corn crop --- or about 275 million bushels --- to produce almost 750 million gallons of ethanol annually, said Lucy Norton, director of marketing for the Iowa Corn Promotion Board.

The soybean industry would also benefit from increased use of renewable energy sources, and the National Biodiesel Board and the American Soybean Association endorsed Nussle's bill Monday.

Biodiesel is a fuel made primarily from soybean oil and --- like ethanol --- is becoming more prevalent nationwide. Five years ago, the NBB estimated that American plants produced only 500,000 gallons of biodiesel. By 2003, production rose to 25 million gallons.

The measure could help biodiesel expand further, which NBB spokeswoman Jenna Higgins said would ultimately increase the overall value of farmers' soybeans.

"We're very grateful for this bill," Higgins said. "Even if biodiesel could just replace 1 or 2 percent of the diesel market, that would be millions and millions of gallons that wouldn't have to be imported."

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