For nearly half a decade, ethanol advocates pushed for several different versions of what finally became the Energy Policy Act of 2005, the landmark bill President George W. Bush signed into law in August. Throughout that unforgettable stretch of years, the energy bill was, by most measures, priority No. 1 for national associations representing ethanol. It was also a talking point that garnered top billing at the International Fuel Ethanol Workshop & Trade Show, the National Ethanol Conference: Policy and Marketing, the American Coalition for Ethanol (ACE) Conference, and various other renewable fuels conferences and meetings across the nation.
 
 So now what? Now that the celebration of this momentous legislation has waned, what goal is the industry collectively striving to achieve? After talking with ACE, the Renewable Fuels Association (RFA), the National Corn Growers Association (NCGA), the National Ethanol Vehicle Coalition (NEVC) and the Governor's Ethanol Coalition (GEC), the overall consensus is: Although the energy bill has passed, there is still much work to be done to implement the renewable fuels standard (RFS). However, other issues have also come to the forefront. Here, EPM details the near-term future agendas of these groups.
 
 RFS implementation
 So the RFS was signed into law, but the challenge remains: How will a 7.5 billion-gallon renewable fuels mandate be implemented by 2012? To make sure the mandate is implemented properly, the U.S. EPA released its Energy Policy Act interim rule in late December. The provision states that a total of 4 billion gallons of renewable fuels must be used in 2006. For now, it will not be implemented on a refiner-by-refiner basis until the details of a credit-trading program are determined. If the United States doesn't use the 4 billion gallons for whatever reason, the remainder will be added to the 4.7 billion-gallon requirement for 2007. The U.S. ethanol industry recently crossed the 4 billion-gallon production mark, so adequate supply is nearly guaranteed. 
 
 Additional work is required of the EPA. RFA President and CEO Bob Dinneen said the Energy Policy Act of 2005 requires 16 regulations, nine studies and four grant programs, along with the rewriting of the emissions model. "There is a lot of work, and that's just for the EPA," Dinneen said. "We've got to make sure this [RFS] program is a success. We'll continue to work with various groups to make sure the program can get up and running and is the success we all want it to be."

 
 Other departments are required to conduct studies, such as one recently completed by the Federal Trade Commission. The study explored the ethanol industry's market concentration and concluded, "The level of concentration in ethanol production would be unlikely to provide the opportunity or incentive for one or more firms to act anticompetitively." In other words, the ethanol industry consists of such a variety of companies that it provides healthy competition and thus cost-effective prices for consumers.
 
 The GEC will also be conducting studies to determine whether the current RFS demands the proper level of ethanol or if it should be expanded, according to GEC Chair Representative Carole Jordan of the Kansas Department of Agriculture. Kansas Gov. Kathleen Sebelius became GEC chairwoman Jan. 1.
 
 The Energy Policy Act included provisions dealing with cellulosic ethanol, which the EPA will also address, although the U.S. DOE will be responsible for funding the research involved in the provision. "It's important to recognize that government efforts are critical, but ultimately it's going to take investment and resources of the industry to commercialize cellulosic ethanol," Dinneen said. "There is not an ethanol producer that I represent that doesn't have an aggressive cellulose-to-ethanol research plan in place."
 
 For example, RFA-member Iogen Corp. is currently considering the construction of a commercial cellulose-to-ethanol plant in Idaho, while the National Corn-to-Ethanol Research Center is working on corn stover research at its facility in Edwardsville, Ill. These efforts, and others like them, will help advance cellulosic ethanol technology further, and the Energy Policy Act could be an important aid in the endeavor. "It's to everyone's advantage to get that plant built in Idaho and to make sure all the research dollars included in the energy bill come to light and are appropriated," said Samantha Slater, NCGA director of public policy. "If you are talking about [producing] a huge percentage of renewable fuels, you're going to need a variety of feedstocks."
 	
 More ethanol legislation
 Following the passage of the RFS, more ethanol legislation is being proposed. In November, Sens. Tom Harkin, D-Iowa; Richard Lugar, R-Ind.; and Barack Obama, D-Ill., introduced bipartisan legislation to increase the number of flexible fuel vehicles (FFVs) being manufactured. The bill, S. 1994, would require in roughly 10 years that all new cars sold in America be FFVs. Both the RFA and NCGA are supportive of this bill. "People believe the RFS is fine, but we need to do more to promote E85 vehicles and infrastructure," Dinneen said.
 
 According to Slater, the FFV bill would require automobile manufacturers to increase the number of FFVs manufactured by 10 percent each year over a 10-year period. It would then reward the manufacturers that stick to this schedule with credits that can be purchased by other manufacturers that are behind schedule. "The time has come for this country to get serious about its automobiles," Slater told EPM.
 
 However, not all ethanol groups are supportive of the proposed FFV legislation, mainly the GEC and NEVC. "We have many automobile manufacturers that are members of ours, and mandatory regulations are not part of our organization," said Michelle Kautz, NEVC director of communication. "We stand by our vehicle manufacturers' opinions and choices." Jordan said the GEC also supports voluntary FFV production versus a mandate.
 

 Kautz pointed out that many automobile manufacturers have stopped producing other alternative fuel vehicles, such as compressed natural gas vehicles, because they are costly to make. FFVs are not as expensive to manufacture and can be sold to consumers at a lower price. Kautz said that as consumers demand more FFVs, automobile manufacturers could increase FFV production without a mandate. "They know the consumer has a need or want for something other than a gasoline-powered vehicle to reduce our dependency on foreign oil," Kautz said.
 
 Dinneen said the RFA isn't pushing for an FFV mandate, but he said something must be done to increase the amount of FFVs. "It appears to us current incentives for E85 [vehicles] aren't doing their jobs," Dinneen challenged. "If automobile companies don't use this approach but share our view of wanting to see more E85 vehicles, then come to the table and tell us what incentives you need to get more [FFV] vehicles out there. … We need to be doing more. Harkin recognizes that, and others on Capitol Hill do too."
 
 Also in November, Rep. Gil Gutknecht, R-Minn., introduced bipartisan legislation that would require a 10 percent blend of renewable fuel in all gasoline sold in the United States by 2010. Formally known as the "10 by 10 Act," or H.R. 4357, the bill would also help the nation reach its 7.5 billion-gallon RFS goal. "Although the 2010 date is a bit difficult, it addresses the concept of, ‘What do we move toward next after the 7.5 billion-gallon RFS?' " Slater said. Rep. Jack Kingston, R-Ga., has proposed a similar ethanol policy as well.
 
 On the state legislative level, ACE Executive Vice President Brian Jennings said his organization will continue to work on getting ethanol legislation passed this year. Jennings himself has testified recently for mandatory ethanol blends in Wisconsin, Iowa, Nebraska and Minnesota (E20). Jennings also testified in front of the Montana legislature that passed an E10 mandate earlier this year. In addition, ACE helped Kansas with its voluntary ethanol pump labeling program. "That's a very good role for ACE to play, and we're going to play that more aggressively," Jennings told EPM.
 
 Farm Bill issues
 The last Farm Bill was signed in 2002, and since it's updated every five years, many agricultural proponents will be working this year to rewrite the 2007 Farm Bill. What does this have to do with ethanol? For the first time in history, the 2002 bill contained an energy title that created popular programs such as the USDA Commodity Credit Corporation Bioenergy Program and Federal Biobased Products Preferred Procurement Program, which have helped fund many ethanol industry efforts. 
 
 In preparation for the 2007 Farm Bill, some rumors have spread that the energy title's funding, which had aided many ethanol producers in the past, may be cut drastically. Technically, the entire energy title could be rewritten or changed to include different programs. "There are already a lot of groups talking about the next energy title and what ethanol programs the industry would like to see included in the next Farm Bill," Slater said. "In 2002, the ethanol industry was a lot different than what it is today, so the NCGA will focus on what farmers need or want in the next energy title that will help them increase farmer ownership in ethanol." Slater added that the rural development title is also a priority of the NCGA for similar reasons.
 
 ACE is also staying on top of Farm Bill issues. "We want to talk to corn growers and find out what is best for them," Jennings said. "We want to improve that energy title." Jennings also expressed interest in the commodity title, which has three primary payments for producers who grow crops: the direct payment program, the counter cyclical program and the marketing program. Jennings said a possible addition to the 2007 Farm Bill could substitute the direct payment with an investment in an ethanol or biodiesel facility. "There are a lot of ideas, but we're in more of a fact-finding mode," Jennings said of ACE.
 
 Upgrading river transport

 The Water Resources Development Act (WRDA), a priority of the NCGA during the last legislative session, was left on the table when the 109th Congress recessed, but the NCGA is making sure it remains a top priority in 2006. WRDA is a proposed bill that would upgrade the various lock systems along the Mississippi River that essentially connect the eastern and western parts of the country. Not only are various grains barged across, but a growing amount of ethanol is also transported through a lock system that is starting to show its age. With the passage of the RFS, Slater said it is only inevitable that even more grain and ethanol will be transported between the riverbanks, making upgrades necessary. WRDA has already passed the House, and if the Senate passes the bill, it would then go into conference before hopefully being passed. "Our hope is to get WRDA done early in 2006," Slater said. "Then the NCGA can focus on the Farm Bill."
 
 Most likely, several more ethanol-related legislative bills will be proposed and discussed throughout the coming year, keeping the industry's respective trade organizations continuously busy. Although the Energy Policy Act was a celebratory milestone, it was in no way an indication that these groups will have a moment's rest. There's room to grow, and making legislative headway will only speed things along at a faster pace. EP
 
 Jessica Williams is associate editor for Ethanol Producer Magazine. Reach her at <a href="mailto:jsobolik@bbibiofuels.com">jsobolik@bbibiofuels.com</a> or (701) 746-8385.

The Energy Policy Act of 2005, including the renewable fuels standard, was a four-year battle fought in no small part by U.S. trade associations and advocacy groups representing ethanol and agriculture. Now that the legislation has enacted  a 7.5 billion-gallon renewable fuels mandate, EPM explores the new goals and challenges that face the industry.

Priorities on the Hill - RFS Implementation and Beyond

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Upcoming Events

2024 International Fuel Ethanol Workshop & Expo

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Carbon Capture & Storage Summit

North American SAF Conference & Expo

2025 International Biomass Conference & Expo

Priorities on the Hill - RFS Implementation and Beyond