Iowa Gov. Chet Culver met with senior White House officials last week to discuss Iowa and the nation's biofuels industry. This meeting was scheduled after Culver urged President Obama to move forward E15 blended gasoline during the President's Iowa visit the previous week. Culver is chairman of the National Governor's Biofuels Commission.
"I look forward to continuing our conversation and developing new and innovative strategies that will help our farmers, our biofuels producers, and all Americans," Culver said. In addition, White House staff reiterated the President's agreement with the Governor regarding his encouragement of the availability of more flex-fuel vehicles and the installation of retail blender pumps, which is crucial to the development of the next generation of biofuels.
Iowa is the largest U.S producer of ethanol and the industry is vitally important as a corn market, in the creation of thousands of jobs, contributes to the national energy supply, and contributes to the Iowa and U.S. economy.
Culver discussed the E15 waiver decision, pending by EPA
Culver also discussed with White House officials the federal governments pending decision regarding whether or not to allow higher ethanol blends to be sold nationwide for use in non-flex fuel vehicles. Sometime this summer the federal Environmental Protection Agency is to decide whether or not to allow the E15 ethanol blend to be sold nationwide. Currently, EPA only allows a 10% ethanol blend, or E10, to be used in non-flex fuel vehicles.
The automobile industry is concerned that the 15% blend with gasoline will cause problems with older model cars. EPA is holding off on its decision until currently on-going tests to answer that question are finished. There is concern that if the EPA approves the use of E15 only for cars that are 2001 and later models, that no gasoline marketer is every going to move forward with it because they aren't going to want to sell fuel to only half of the marketplace.
Need to extend federal ethanol tax credit is very important
Culver also told White House advisers that the biodiesel tax credit which expired at the end of 2009 needs to be reinstated and that the ethanol tax credit which is scheduled to expire at the end of 2010 needs to be extended.
Congress let the federal biodiesel tax incentive expire at the end of 2009, which has caused the biodiesel industry in the U.S. to all but completely shut down. Congress still hasn't renewed the biodiesel tax credit, and their inaction has thrown a lot of people in the biodiesel industry out of work. The U.S. had 23,000 people employed in the biodiesel industry at the end of 2009, and now many of them are unemployed.
The ethanol tax incentive is set to expire at the end of 2010. What should corn growers be doing to try to make sure Congress renews and extends the ethanol tax credit? They should be talking to members of the U.S. House and Senate about this matter. "We don't want Congress to make the same mistake they made with the biodiesel tax credit," notes Mindy Larson Poldberg, director of government affairs for the Iowa Corn Growers Association.
All seven of Iowa's congressional representatives have signed on
She explains "on December 31, 2010 the 45-cent-per-gallon ethanol tax credit which ethanol blenders receive as an incentive to blend ethanol into gasoline is going to expire. We see what happened to the biodiesel tax credit. It still hasn't been renewed and the biodiesel industry in the U.S. is now virtually shut down. We advocated for renewal of the biodiesel tax credit of $1 per gallon and are still doing so. By not renewing it, Congress has created a terrible mess in the biodiesel industry. The same thing could happen to the ethanol industry if that blenders tax credit isn't renewed by the end of this year."
All seven of Iowa's congressional delegation - both of U.S. Senators and all five members of the U.S. House of Representatives from Iowa, are supportive of renewing the blenders credit of 45 cents per gallon for ethanol. And they've signed on to support it.
But that's not enough, says Poldberg. "We need Iowa's Senators and Representatives to reach out to their colleagues, either in the Democrat or Republican caucus, and try to get other states on board to support this blenders tax credit renewal. Right now there are only seven co-sponsors of that bill in the Senate. And two of them are Iowans. So we really need to reach out to other states and ask our members of Congress to reach out to other states' senators and congressmen and try to get the ethanol tax credit renewed."