USDA is working to create supply, demand for biofuels
By Heather Thorstensen
Date Modified: 05/05/2011 9:05 AM
INVER GROVE HEIGHTS, Minn. — The U.S. Department of Agriculture is working to create more supply and demand for renewable fuels nationwide, said U.S. Secretary of Agriculture Tom Vilsack.
The secretary held a renewable fuels round table April 20 at CHS Inc. in Inver Grove Heights.
During a media briefing, he discussed how the government is funding research into different sources of biomass, alternative ways to make biofuels and ways to improve the biorefinery process.
USDA is providing grants and guaranteed loans to farmers and small businesses through the Rural Energy for America Program for projects related to renewable energy development.
Part of REAP funds will go toward installation of flexible fuel pumps at fuel stations.The Obama administration's goal is to have 10,000 more flexible fuel pumps put in nationwide in the next five years.
The government is also working with the U.S. Navy and has a memorandum of understanding with the Federal Aviation Administration so that more renewable energy is used in jet fuel.
Minnesota is a leader in supporting biofuels and no better champion for them exists in the U.S. Senate than the state's Sen. Amy Klobuchar, he said.
In March, Klobuchar, D-Minn., and Sen. Tim Johnson, D-S.D., introduced the Securing America's Future with Energy and Sustainable Technologies Act.
The purpose of the bill is to create jobs, decrease the country's need for foreign sources of energy, strengthen national security and re-establish America as a global energy technology leader.
It does this by creating long-term incentives for renewable energy development.
One part of the bill would re-direct the federal tax credit for ethanol.
The Volumetric Ethanol Excise Tax Credit would be extended for five years, starting at 20 cents-per-gallon instead of the current level of 45 cents-per-gallon. It would be phased out by the fifth year.
Savings would go toward research and development plus infrastructure that will be needed to support biofuels going forward, Klobuchar said. Another part would go toward deficit reduction.
The credit would go to those who make the biofuel instead of those who blend it with gasoline.
The bill has been referred to the finance committee.
Biofuels are already a major part of a successful rural economy, said Klobuchar, adding that America is making almost as much biofuel now as the amount of oil that's imported from Canada.