Ethanol leaders pitch plan to build potential for renewable fuels

WASHINGTON -- If 200,000 blender pumps were constructed at gasoline stations around the country in five years, ethanol could compete "head on" with petroleum, the head of the world's largest producer of renewable fuel told the Senate Agriculture Committee March 30.

"We are dealing with an industry that has a monopoly," said POET CEO Jeff Broin.

He testified at a hearing that chair Debbie Stabenow, D-Mich., titled "Fundamentals and Farming: Evaluating High Gas Prices and How New Rules and Innovative Farming Can Help."

"You caught my attention with that," replied Sen. Mike Johanns, R-Neb. "It has some possibilities."

A plan for ethanol

In his testimony, Broin, who is based in South Dakota and operates 27 ethanol plants in seven states, promoted "Fueling Freedom," an ethanol policy reform plan that would permanently scale back the ethanol tax credit and replace it with a government program that would subsidize the installation of blender pumps, require flex fuel vehicles and allow ethanol pipelines access to loan guarantees.

"With those elements in place, the oil industry and their suppliers would no longer enjoy exclusive access to 90 percent of American fuel tanks," Broin said.

Growth Energy, the ethanol lobbying group that POET started, is trying to convince other parts of the ethanol industry, the Obama administration and Congress to support the plan. Broin told reporters that he thinks the industry will reach agreement shortly.

Broin also said he thinks speculation by index funds and other institutional investors has led to higher commodity prices.

Stabenow related the concerns of Michigan snowmobilers that gasoline with 15 percent ethanol content will not be good for small engines.

"We are not taking away unleaded gasoline," Broin said, adding that E15 will be labeled "not for small engines."

In other testimony, Bruce Dale, a professor of chemical engineering at Michigan State University, testified that double cropping could be used to grow large crops of cellulosic material without causing food shortages or environmental devastation.

Double cropping

Double crops would be annual grasses and legumes planted after the corn or soy crop is harvested in the fall, and then harvested in late spring before the new corn or soy crop, Dale said.

Double cropping on one-third of corn and soy land would allow the production of raw materials for 100 billion gallons of ethanol, he added.

The 100 billion gallons of ethanol would be roughly the same amount of gasoline as the United States imports, and the practice also would improve soil quality and biodiversity and reduce total U.S. greenhouse gas emissions by 10 percent, creating a "win-win-win for national security, economic security and climate security," Dale said.

The hearing occurred shortly before President Obama gave a speech at Georgetown University on energy security.

Oil independence

Obama presented a plan for reducing dependence on foreign oil by one-third through increasing fuel savings, producing electric cars, converting trucks to run on natural gas, and building biofuels refineries.

"If anyone doubts the potential of these fuels, consider Brazil," Obama said. "Already, more than half -- half -- of Brazil's vehicles can run on biofuels."

Obama said that the U.S. Air Force recently used an advanced biofuel blend to fly an F-22 Raptor faster than the speed of sound. He also said that the Air Force is aiming to get half of its domestic jet fuel from alternative sources by 2016 and that he has directed federal agencies to create advanced biofuels for trucks and commercial airliners.

"Going forward, we should look for ways to reform biofuels incentives to make sure they meet today's challenges and save taxpayers money," Obama added.

But while the president highlighted Brazil's advances in biofuels, Senate Agriculture ranking member Pat Roberts, R-Kan., noted at the Senate Agriculture hearing that Obama said during his Latin America trip earlier in March that the United States is eager to help expand Brazilian offshore oil development.

Roberts said it is a "paradox" that, with 86 billion barrels of oil reserves within the U.S. Outer Continental Shelf, the president would be offering up technology and support for competitors abroad "while his administration stifles production at home."

He also noted that oil and gas adds $14 billion a year to the Kansas state gross product and creates 119,000 jobs.