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An opinion piece by Sen. George Voinovich

Despite a contentious and partisan debate on establishing a national energy policy this year, the Senate was able to achieve a bipartisan agreement that will expand the market for one of Ohio’s top commodities – corn. The agreement included in the energy bill will expand the production and use of ethanol, a clean-burning fuel additive derived from corn.

Ethanol offers substantial environmental benefits. As a fuel additive, it makes gasoline burn cleaner by working as an oxygenate that enhances the combustion of gasoline and reduces emissions of toxic gases. Furthermore, ethanol is produced in the United States from domestic products, making its use as an alternative fuel source part of the strategy to reduce our dependence on foreign oil. Simply put, the more fuel we use with ethanol, the less oil we need to import. Accordingly, the more ethanol you need, the more corn you produce.

Ohio is no stranger to ethanol. Last year, our state consumed 211 million gallons of the corn-based fuel additive, making Ohio the nation’s second-largest consumer of ethanol. Recent figures also show that Ohio is the nation’s sixth-largest corn producing state, which is why expanding the ethanol market is important to our state’s economy.

I was part of a bipartisan group of senators from corn-producing states that helped write legislation to make increased ethanol use a major part of our national energy policy. Critical to this legislation was reducing the use of MTBE, a petroleum-based fuel additive which has been found to contaminate water supplies.

The bipartisan agreement, known as the Reformulated Fuels Standard (RFS), calls for increasing the use of ethanol from the estimated 1.8 billion gallons used last year to 5 billion gallons annually by 2012 and phasing out MTBE over four years. In the end, the agreement expands the ethanol market which will create new jobs and increase farm income in Ohio by as much as $150 million annually, according to the National Corn Growers Association.

Ironically, Ohio’s extensive use of ethanol actually reduces the amount of federal highway funds we receive. As a top ethanol consumer, Ohio was losing millions of dollars per year due to quirks in the federal highway funding formula which essentially made states pay for the tax breaks in place to encourage ethanol’s use. While the right thing would be to encourage greater use of clean-burning fuel additives like ethanol, federal rules actually worked against those states that used ethanol.

To correct this shortsighted problem, I went to my colleagues that head up the Senate Finance Committee, Chairman Sen. Max Baucus (D-MT) and ranking member Charles Grassley (R-IA), and asked them to provide legislation for the energy bill to transfer the 2.5 cents from the federal gas tax that now goes to the General Treasury and redirect it to the Highway Trust Fund. The inclusion of this provision in the final energy bill will allow Ohio to get more credit for the federal gas taxes it collects on gasoline that contains ethanol. As a result Ohio could receive more than $30 million in additional highway funding.

While Ohio is already a leading consumer of ethanol, encouraging its capacity as a producer is now more important than ever. As the nation’s sixth-largest corn producer, Ohio is the largest corn-producing state without an ethanol production facility. Hopefully this will soon change. Earlier this year, Gov. Bob Taft signed Senate Bill 144, which provides tax incentives for farmers to invest in new ethanol production facilities and tax abatements under the Air Quality Development Authority. In addition, interest has been expressed by private businesses in constructing ethanol plants at different sites in Ohio. The timing couldn’t be better as the ethanol market prepares to expand.

Successfully balancing the needs of the economy and the environment, reducing our reliance on foreign energy, and developing a balanced domestic energy resource base is no easy task as the Senate demonstrated during the recent energy debate. We were, however, able to pass an historic agreement that will benefit Ohio, its environment, and its agriculture economy. Through the new ethanol agreement, Ohio can reap the benefits of new job creation, more highway funding, a stronger economy and a cleaner environment – and that’s good news.