via a special arrangement with Informa Economics, Inc.
What ethanol lobbyists are urging Obama team,
lawmakers to include in stimulus package
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ethanol industry lobbyists and industry officials are urging the following
programs to congressional leaders and to President-elect Barack Obama
and his top officials as part of a multibillion-dollar economic stimulus
package to be acted on early in 2009:
Credit facility for operating capital: Establishment of
a $1.0 billion short-term credit facility that would provide ethanol producers
with access to short-term credit to finance current operations. Access
to these funds would be made available to qualifying ethanol producers
through community and rural banks and the Farm Credit System at the prevailing
non-financial commercial paper interest rate.
-- Federal loan guarantees for capital
expansion: Establishment of a $50 billion Federal loan
guarantee program to finance investment in new renewable fuel production
capacity and supporting infrastructure.
-- Renewable fuel job creation tax credits: The ethanol
industry has created nearly 10,000 direct manufacturing jobs in the American
economy. Expansion of the industry to meet the 36 billion gallon Renewable
Fuel Standard will provide a solid foundation for the creation of the
2.5 million new Green jobs called for by President-elect Obama. In order
to preserve this foundation and ensure the creation of new manufacturing
sector jobs, ethanol producers should be provided with an income tax credit
for every “Green Job” created by production operations.
-- Expanded federal funding for research
and development in new renewable fuel technology: Existing
funding for R&D grants in second generation ethanol technology should
be extended and expanded to accelerate commercialization.
-- Establishment of flex fuel capability
for all new vehicles: Any automobile manufacturer receiving
federal financial assistance will be required to ensure that any and all
new vehicles produced beginning with the 2010 model season be flex fuel
capable (e.g. capable of running on any ethanol blend up to and including
The ethanol 'wish list' got a quick reaction
from members of the Food Before Fuel coalition, who noted the
-- America needs to change course when it comes to biofuels, moving our
policies away from the promotion of corn ethanol and toward energy solutions
that do not pit our energy needs against our need for affordable food
and enhanced environmental protection
-- As Congress and the Obama administration consider the ethanol lobby’s
ideas a few key points that should guide their thinking:
* First, corn ethanol is not a green fuel. It contributes to carbon
emissions and ground level ozone. That is why virtually every major
environmental organization in the world has come out against policies
that expand the use of corn ethanol. So corn ethanol jobs are not “green
jobs” at all.
* Second, policies that promote expanded use of corn ethanol continue
to drive inflation in food and feed prices. Consumers paying more at
the checkout counter aren’t getting a bailout. Neither are industries
like the poultry industry that have lost billions and shed thousands
of jobs due to corn ethanol driving up corn prices to historic highs.
* Third, after 30 years of government subsidies corn ethanol is still
not competitive in the market – and it is time to ask if we are
just throwing good taxpayer money after bad – especially in light
of the new evidence that corn ethanol is not green and that it does
contribute to higher food and feed costs.
* Fourth, raising the blend limit beyond E10 will only create a whole
new set of challenges. Blend limits higher than E10 have been shown
to impair engine performance, which is why leading organizations representing
the boating industry and others have expressed their opposition. In
fact, blends above E10 often invalidate auto warranties because of their
impact on engines.
* Finally, all sides agree on the need to move toward second generation
biofuels that are truly sustainable and that do not use food-grain feedstocks.
But there is no evidence that further supporting corn ethanol will help
us reach that goal. Providing an old technology a crutch is rarely a
formula for promoting the innovation needed to advance a new technology.
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