ASA Applauds Senate Amendment for 8 Billion Gallon Renewable Fuels Standard

The American Soybean Association (ASA) expressed appreciation for an amendment approved today by the United States Senate Energy Committee that would create, as part of the Energy Bill, an eight billion gallon national Renewable Fuels Standard (RFS) to be phased in by 2012, starting with four billion gallons in 2006.

“ASA thanks Senators Jim Talent (R-MO), Tim Johnson (D-SD) and Byron Dorgan (D-ND) for their efforts in promoting an eight billion gallon Renewable Fuels Standard,” said ASA President Neal Bredehoeft. “Increased use of renewable fuels will help support better prices paid to farmers.”

The ethanol and biodiesel industries have undergone unprecedented growth over the past several years. In fact, the U.S. currently has the capacity to produce more than 3.7 billion gallons of ethanol and biodiesel, and plants under construction will add an additional 700 million gallons of capacity by the end of the year. Most of this growth has been in farmer-owned plants, which taken as a whole, now represent the single largest producer in the country.

The production and use of 8 billion gallons of ethanol, biodiesel and other renewable fuels by 2012 will displace over 2 billion barrels of crude oil and reduce the outflow of dollars largely to foreign oil producers by $64.1 billion between 2005 and 2012. As a result of the RFS, America’s dependence on imported oil will be reduced from an estimated 68 percent to 62 percent.

The renewable fuels sector will spend an estimated $6 billion to build 4.3 billion gallons of new ethanol and biodiesel capacity between 2005 and 2012, and nearly $70 billion on goods and services required to produce 8 billion gallons of ethanol and biodiesel by 2012. Purchases of corn, grain sorghum, soybeans, corn stover and wheat straw alone will total $43 billion between 2005 and 2012.

“Enacting a RFS that provides a market of 8 billion gallons by 2012 demonstrates a firm commitment to reducing this nation’s foreign oil dependence while providing a significant impact to the American economy,” Bredehoeft said. “The RFS is a vital and necessary component of any energy policy designed to reduce our nation’s dependence on foreign sources of petroleum.”