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Guest Commentary: July 11, 2001
The Renewable Fuels for Energy Security Act
The Honorable Chuck Hagel
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Ethanol and biodiesel can play a critical role in our national energy policy and provide an important market for Nebraska agriculture producers. I [have] introduced the Renewable Fuels for Energy Security Act, along with Sen. Tim Johnson (D-SD).
This legislation establishes a national standard for the use of renewable fuels, like ethanol and biodiesel, in gasoline and diesel fuel. Using more renewable fuel benefits our nation by increasing domestic fuel supplies, reducing the trade deficit and improving the quality of our air, while expanding the market for farmers in the process. ...
The Renewable Fuels for Energy Security Act will gradually increase the market share for renewable fuel to 3 percent by 2011 and 5 percent by 2016. This will be done by requiring that every gallon of gasoline or diesel refined in the United States contains a percentage of clean-burning, domestically-produced ethanol or biodiesel.
The impact of this would be dramatic. A 3 percent market share for ethanol and biodiesel would displace about 9 billion gallons of gasoline annually, or between 500,00 and 600,000 barrels of crude oil a day. That is roughly the amount of oil we import from Iraq every day.
The Renewable Fuels for Energy Security Act helps reduce our dependence on foreign oil. Last year, foreign crude oil made up the single largest component of growth in our trade deficit. It is anticipated that by the year 2020, our dependence upon foreign oil will increase to 74 percent, costing the U.S. more than $170 billion a year. A more rational and responsible policy is to replace the oil we import from foreign countries with corn and soy products grown here at home.
America has a chance to develop energy and environmental policies that work together. A clean environment and a strong energy policy need not be mutually exclusive. Expanding the use of renewable fuels is proof of that. Ethanol and biodiesel burn cleaner. Ten-percent ethanol blends reduce carbon monoxide better than any other reformulated gasoline blend. A 1998 joint study by the Department of Energy and USDA also concluded that biodiesel reduces net carbon dioxide emissions by 78 percent compared to petroleum diesel.
Increasing the market share for ethanol and biodiesel will have a direct benefit for agriculture producers in Nebraska. Ethanol increases net farm income by more than $12 billion annually, contributing around 14 cents to every bushel of corn. According to the Food and Agricultural Policy Research Institute, 70 million gallons of annual demand for biodiesel could add $0.10 to $0.18 per bushel to the price of soybeans. Inclusion of biodiesel in regular diesel fuel at a level of just 1 percent would add a minimum of 30 cents to the value of a bushel of soybeans.
America needs a responsible and relevant national energy policy that includes ethanol and biodiesel. Expanding the market for renewable fuels will provide a much needed source of added value to many of Nebraska's producers. The Renewable Fuels for Energy Security Act is responsible legislation that will be an important part of America's energy plan for the 21st Century.
Note: Sen. Hagel issues a weekly column; this column was released on June 12, 2001.
 How to contact Sen. Chuck Hagel (R-NE)
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