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Tuesday, May 3, 2016

Senate plan pushes alternative fuels

Tuesday, April 8, 2003

INDIANAPOLIS - Senate Republicans unveiled their JOBS plan Wednesday, which is a package of special initiatives aimed at creating high-paying jobs in Indiana. The package includes an innovative program to promote the production and use of grain-based alternative fuels in Indiana.

"Secretary of Agriculture Ann Veneman has said repeatedly that American agriculture needs to increase efforts to develop alternative fuels as the United States searches for new sources of energy," said Brandt Hershman, R-Wheatfield. "Grain-based fuels, such as ethanol and bio-diesel, are also cleaner burning and create a market for our agricultural products."

The plan will include tax credits for the production and use of Indiana grain-based fuels. While the details are still being worked out, the plan's developers say the idea is to offer incentives for a number of programs to encourage the implementation of alternative fuels programs.

"We hope to include all facets of the process - from soybean crushers to oil refineries to the service stations that will supply the fuel," said Senator Bob Jackman, R-Milroy. "If it's located in Indiana and is involved in the grain-to-fuel process, then we hope to make it part of this plan."

"Production of grain-based fuels is fiscally responsible and will prove to be an efficient use of our financial resources," said Senator John Waterman, R-Shelburn. "The production and use of biodiesel makes a bold step toward reducing dependence on foreign oil by using a renewable fuel source that is also environmentally friendly."

According to the United Soybean Board, biodiesel represents the largest potential industrial use of soybeans. A recent study conducted by an independent consultant shows that as little as four percent renewable fuel use by 2016 would increase soybean production from 51 million bushels in 2002 to 318 million bushels by 2016. Based on that level of demand, soybean prices could increase an average of 68 cents per bushel. Another study, completed in 2001 by the USDA, found that an average annual increase of 200 million gallons of biodiesel would boost total crop receipts by $5.2 billion cumulatively by 2010.

Ethanol is a high-octane blending component used by many gasoline marketers. The ethanol industry helps extend the petroleum supply, thereby helping reduce fuel costs for consumers. According to the American Coalition for Ethanol (ACE), U.S. consumers use more than 18 billion gallons of ethanol-blended gasoline each year. Ethanol has been shown to increase oxygenate supplies, reducing the need for methyl tertiary butyl ether (MTBE) imports and helping to reduce consumer costs. Not only does the use of MTBE increase imports, but it has been found to contaminate drinking water supplies.

"Our initiative focuses entirely on investing in Indiana and creating jobs," said Senator Tom Weatherwax (R-Logansport). "The economic benefits of using biodiesel and ethanol affect not only farmers, but also local communities, the state and the nation as a whole."

According to ACE, more than $3 billion has been invested in 60 ethanol production facilities operating in 20 different states across the country. More than 40,000 jobs have resulted from the ethanol industry, creating more than $1.3 billion in increased household income annually. That income will grow to more than $12.6 billion over the next five years, and senators want to be sure Indiana is a part of that.

"Increases in ethanol and biodiesel production offer enormous potential for economic growth in rural communities," said Senator David Ford (R-Hartford City). "Many farmers and agricultural cooperatives now own and operate grain-based fuel plants, allowing them to add value to their own grain. Indiana must step forward to assist these people who are trying to help themselves."

The proposal will be considered over the course of this week, as part of an economic development package moving through the Indiana General Assembly.

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