American Soybean Association President Mark Berg testified before the Senate Energy and Natural Resources Committee today urging Congress to approve legislation designating blends of biodiesel and petroleum diesel as an alternative fuel, and therefore, eligible for use in alternative-fueled vehicles in government fleets. Berg, a soybean producer from Tripp, S.D., explained the value of the decision to help reach goals created under the Energy Policy Act of 1992 (EPACT).

The EPACT calls for alternative fuels to replace imported petroleum used by the transportation sector by 10 percent by the year 2000 and 30 percent by 2010. Yet, imported petroleum use in this sector is steadily increasing. According to the Department of Energy, petroleum import dependence in this sector was about 40 percent in 1992 and will reach almost 60 percent by the year 2005.

"We would like to see biodiesel become an established alternative fuel and make a contribution toward achieving EPACT’s goals, not through vehicle or fuel subsidies, tax breaks, or additional mandates, but through the elementary and expedient method of designating a blend of biodiesel and petroleum diesel, called B-20, as an alternative fuel," Berg said. "We are asking for the opportunity to compete fairly within the EPACT market."

Biodiesel is a cleaner-burning diesel fuel made from natural, renewable sources such as soybean oil that is often in surplus. It is widely used in Europe and Japan and is available in the United States. An independent study has verified that the 20 percent biodiesel and 80 percent petroleum diesel blend (B-20) reduces air pollution when used with a catalytic converter. Compared to petroleum diesel, biodiesel blends have significantly lower emissions of the pollutants that may be cancer causing. B20 reductions are over or around 50% in particulate matter, carbon monoxide, carbon dioxide, and sulfur dioxide in comparison to petroleum diesel emissions.

Congress is currently considering amendments to EPACT that would qualify biodiesel for use in fleets regulated under the program. Senators Tim Johnson (D-SD) and Larry Craig (R-ID) sponsored the legislation (S. 1141) in the Senate, while Representatives John Shimkus (R-IL) and Karen McCarthy (D-MO) sponsored the legislation (H.R. 2568) in the House.

Enactment of this legislation could add 11 cents to the price of every bushel of U.S. soybeans. Here’s how: The government’s fleets include more than 375,000 buses, 295,000 medium and heavy-duty trucks and a large numbers of off-road vehicles. If these mostly diesel-powered vehicles were allowed to count toward EPACT’s light-duty vehicle purchase mandates, they would require more than 1.5 billion gallons of fuel annually. If biodiesel blends were permitted under EPACT, a 20 percent biodiesel blend running in just 10 percent of these EPACT vehicles would use 30 million gallons of biodiesel each year. This market would absorb 219 million pounds of soyoil and support the price of oil by 1 cent a pound. Because there are 11.4 pounds of oil in a bushel, this would push up the price of soybeans by over 11 cents per bushel.

"Biodiesel is not a threat to any alternative fuel’s market share because fleets already are failing to meet their vehicle purchase requirements at the same time as those requirements are continuing to increase," Berg said. "The pie simply continues to get bigger and more uneaten."