Midwest senators strike back with pro-biofuels bill

By Kris Bevill | March 11, 2011

Two Midwest senators proposed legislation March 10 favoring the build-out of biofuels infrastructure and continued federal support of ethanol and biodiesel. The Securing America’s Future with Energy and Sustainable Technologies Act, introduced by Sens. Amy Klobuchar, D-Minn., and Tim Johnson, D-S.D., would establish incentives for biofuels infrastructure and deployment, develop a “more cost-effective” tax credit program for ethanol and biodiesel, establish a renewable energy standard and encourage greater production of hybrid, electric and flex-fuel vehicles (FFVs).

“At a time of rising gas prices, this bill would provide incentives that can help us utilize more homegrown biofuels, strengthen our homegrown energy economy in Minnesota and secure our energy future,” Klobuchar stated.

The bill immediately received widespread support from renewable fuels and agriculture groups. It has been endorsed by the National Farmers Union, Growth Energy, the National Association of Energy Service Companies, the American Soybean Association, the Minnesota Farmers Union, the Minnesota Corn Growers Association and the National Biodiesel Board. The Renewable Fuels Association has likewise voiced its support for the legislation, but added that other proposals such as a variable tax credit also deserve consideration.

The 117-page SAFEST Act covers a wide spectrum of renewable fuels interests and contains several important provisions related to the ethanol industry. It amends the definition of “advanced biofuel” to include corn starch-derived ethanol. It would allow renewable fuel pipeline projects to qualify for federal loan guarantees equal to 80 percent of the project cost. 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. It attempts to eliminate liability concerns related to the use of ethanol in combustion engines. It also provides subsidies for the installation of blender pumps and requires any entity that owns or manages 10 or more retail fueling stations to install a blender pump at each station.

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.

The legislation also includes text that would prevent the U.S. EPA from considering international indirect land use changes when calculating biofuels’ lifecycle greenhouse gas (GHG) emissions and calls for the National Academies of Science to conduct a review of methodologies used to project indirect GHG emissions relating to transportation fuels.

The Klobuchar-Johnson bill was introduced on the heels of other proposed legislation that seeks to immediately revoke the blenders credit. Senators in favor of eliminating the subsidy have said the move would save $6 billion from the annual federal budget.