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Bill calls for increased use of ethanol, biodiesel

The Senate's last-minute passage of a comprehensive energy bill earlier this month came as welcome, but surprising, news to America's farmers. Just ahead of the summer recess, senators who couldn't agree on the current energy bill voted 84 to 14 to accept a version written in the Senate last year. That move may have saved the chances of having a final bill completed in conference committee this fall. According to AFBF Energy Specialist Troy Bredenkamp, "If the bill had not been completed when it was, there were many predictions that the energy bill may have fallen completely off the schedule," he said.

Further delays would not have set well with farmers who support the energy bill because of its provisions that should help agriculture. The bill includes a Renewable Fuels Standard that calls for increased use of ethanol and biodiesel as well as tax incentives for renewable energy sources, increased domestic oil and gas production, and a natural gas pipeline from Alaska to the continental United States.

The Senate's action means: "Things are looking very promising on the energy front," said Bredenkamp. "We are now going to move forward to get as many changes as we feel necessary in conference so this will be the best bill possible before it reaches the president's desk."

The House and Senate versions have many things in common, but the major exception is in the area of tax incentives. According to AFBF Tax Specialist Pat Wolff, "The House has steered away from tax breaks. The Senate bill is chock-full of measures that would aid in the production of biodiesel and ethanol and electricity made from renewable sources."

Wolff also expects the conference committee to tackle the "renewable fuels penalty." Wolff says both ethanol and biodiesel generate a smaller amount of fuel tax money for the federal highway trust fund. According to Wolff, groups that oppose tax incentives for renewable fuels would stop opposing them if the incentives don't cut into highway funds.

AFBF President Bob Stallman issued a statement saying, "Farm Bureau urges Congress to finish the energy bill conference as soon as they return from the August recess and quickly send a bill to the President's desk. It's important to American agriculture and the U.S. economy."