House Approves Energy Bill, MTBE Provision Included

Lawmakers in Washington, D.C. are on their way again attempting to pass a comprehensive energy bill. The House passed the Energy Policy Act of 2005 by a vote of 249-183.

The major stumbling block from getting a comprehensive energy bill in past years was the House's unwillingness to take out the gasoline additive methyl tertiary butyl ether (MTBE) provision that would require the manufacturers of MTBE, rather than taxpayers, pay for contaminated water supplies. When both houses met to reconcile differences, the House would not budge on the MTBE issue and the Senate didn't have the votes to pass the bill with the MTBE provision included.

And unfortunately this time around the House has started off on the same foot.

There is a positive response from the agricultural community about the first step to get a bill to the President's desk this year. The legislation includes a renewable fuels standard that calls for 5 billion gallons of renewable fuels to be blended into the nation's transportation fuel supply by 2012.

In addition to a 5-billion-gallon RFS, provisions in the bill include:

• Clarifying the federal government's role in siting liquefied natural gas facilities and providing for an efficient approval process;

• New domestic oil and gas exploration and development, and streamlining permitting for natural gas projects on federal lands;

• Creating and publishing a list of existing boutique fuels by the Environmental Protection Agency in order to establish a cap;

• Authorizing the Department of Energy to establish "refinery revitalization zones" in areas with an unemployment rate 20% above the national average, as well as either a closed refinery or 50 or more layoffs in a major manufacturer;

• Promoting clean coal technology and providing incentives for renewable energy such as biomass, wind and solar.

NCGA First Vice President Gerald Tumbleson notes that although the RFS is important to corn growers, the provisions that expand natural gas supplies and other energy sources are also vital to the industry.

"Farmers have already felt adverse effects in their production costs from the continual increase in natural gas prices," he says. "President Bush said very clearly this week that he wants a comprehensive energy bill on his desk for signing by the time Congress recesses this summer."

The ethanol and biodiesel industries have undergone unprecedented growth over the past several years. In fact, the U.S. currently has the capacity to produce more than 3.7 billion gallons of ethanol and biodiesel, and plants under construction will add an additional 700 million gallons of capacity by the end of the year. Most of this growth has been in farmer-owned plants, which taken as a whole, now represent the single largest producer in the country.

"Now we look for the Senate to present legislation that will increase the standard to 8 billion gallons, extend tax incentives for biodiesel into 2011, and modify the qualification for agribiodiesel so that the term only includes esters from virgin vegetable oils derived from crops grown on U.S. farms," says American Soybean Association President Neal Bredehoeft. "Use of biodiesel will help reduce our dependence on foreign oil, improve our environment and improve prices paid to farmers for their soybeans."