Bismarck Tribune 1-06-07
As a new session of Congress gets under way in Washington, North Dakota’s lawmakers are at the forefront of a push for increased federal support of ethanol and biodiesel.
Sen. Byron Dorgan, D-N.D., is co-sponsoring a measure to both increase the amount of ethanol sold in the U.S. and make the E-85 ethanol-gasoline mix more accessible to drivers. Meanwhile, Rep. Earl Pomeroy, D-N.D., is co-sponsoring a bill to extend tax credits for producers of ethanol and biodiesel.
Both measures have Republican co-sponsors from the Midwest and are designed to bolster previous biofuels measures that enjoyed widespread support.
Under Dorgan’s proposed bill, dubbed the Biofuels Security Act of 2007, refineries would be required to gradually increase the amount of ethanol sold in the U.S. It would require 30 billion gallons per year by 2020 and 60 billion gallons per year by 2030.
The current mandate, also pushed by Dorgan, requires 7.5 million gallons by 2012.
“We have no choice but to move in a direction that makes the U.S. more independent of foreign oil,” Dorgan said Friday in a telephone interview.
The other component of Dorgan’s bill would require gas stations to provide E-85 pumps and car makers to make all their vehicles E-85 compatible by 2017. E-85 is a blend of 85 percent ethanol and 15 percent gasoline that requires a special flex-fuel engine for cars to safely burn it.
Even though the ethanol industry is booming across the corn belt, the spread of E-85 has been hampered by the scarcity of both pumps that offer it and cars with the special engines to run on it.
Here in North Dakota, for example, there are only 24 E-85 pumps and 16,000 E-85 compatible vehicles.
Dorgan said his plan would give North Dakota a prominent place in the effort to wean the U.S. off of foreign oil.
“We’re a big agriculture state and we have substantial capacity to produce ethanol and biodiesel in large quantities,” he said.
Across Capitol Hill, Pomeroy teamed up with Rep. Kenny Hulshof, R-Mo., to extend a 10-cent-per-gallon tax credit to small producers of ethanol and biodiesel.
The tax credits, available to those with annual biofuel production of 60 million gallons or less, are set to expire in 2008 for biodiesel plants and 2010 for ethanol plants. This measure would make them permanent.
Pomeroy spokeswoman Sandra Salstrom said the tax credits are crucial to bolstering North Dakota’s burgeoning biofuel industry and preserving the jobs it has created.
“It’s important to him because this industry has such an impact on the North Dakota economy that making the tax cuts permanent is a no-brainer,” Salstrom said.
All three of the state’s ethanol plants - Alchem Ltd. in Grafton, Red Trail Energy in Richardton, and an Archer Daniels Midland facility in Walhalla - are small enough to qualify for the credits.
Despite the bipartisan nature of these measures, the idea of extending more government help to the ethanol industry has its share of critics.
Demian Moore, a senior policy analyst at Taxpayers for Common Sense, a government watchdog group that advocates against wasteful government spending, said the subsidies are not a wise use of taxpayers’ money.
“They’re taking money out of everybody’s pocket to benefit one industry,” he said.
Moore said it would be much more efficient to leave the decision of whether people use ethanol to the free market.
“We don’t think the government should be picking winners,” he said.
Next entry: Plant is producing, Ethanol now flowing from Red Trail
Previous entry: 12/22/06