U.S. Senate Committee on Environment & Public Works
U.S. Senate Committee on Environment & Public Works
Hearing Statements
Date:   09/06/2006
Statement of Senator Max Baucus
Oversight on Federal Renewable Fuels Programs

Mr. Chairman, renewable fuels are a win, win, win. They wean us off our dependence on foreign sources of oil, improve the air we breathe, and revitalize our rural communities across the county and in my home state of Montana by providing new markets for our farmers’ crops. Promoting renewable fuels just makes sense. That is why I’ve worked on the Finance Committee to provide tax incentives to spur investment in the renewable fuels industry. I am also proud of provisions we included in the Energy Policy Act of 2005 to spur use of renewable fuels, especially the Renewable Fuels Standard or RFS. Given the clear benefits of moving to renewable fuels and overwhelming support for them, I want to take this opportunity to urge EPA to finalize the rulemaking implementing the RFS. Finalizing this rule will send a signal to the renewable fuels industry that Congress and the Administration are serious about weaning ourselves off of our dependence on foreign oil. We need to put our money where our mouth is. That means Congress needs to provide sufficient funding, and the EPA needs to get this rule across the finish line.

The Renewable Fuels Standard requires the use of 4 billion gallons of ethanol and biodiesel in 2006. By 2012 that requirement rises to 7.5 billion gallons. That is 7.5 billion gallons of fuel that won’t come from countries hostile to America, 7.5 billion gallons of fuel that will emit dramatically lower levels of such pollutants as benzene and greenhouse gases, and 7.5 billion gallons of fuel that will put money back in the pockets of farmers in Montana and throughout Middle America. And that is a policy that moves America forward.

Renewable fuels could revitalize rural America. In Montana entrepreneurs in towns like Malta and Nashua are looking at ways to make ethanol from wheat and barley as well as cellulosic ethanol. They’re trying to get projects off the ground to make biodiesel from camolina.

We in Congress need to provide incentives to reward their entrepreneurial spirit. That is why on the supply side I have fought for bio fuel tax credits. Working with Senator Grassley, I helped extend the 51 cent per gallon tax credit for ethanol through 2010. On the demand side, we created the Renewable Fuels Standard to make sure there was a market for renewables. And our efforts are beginning to show results. According to the Renewable Fuels Association, U.S. ethanol production capacity will increase by almost 50% in 2006. We must keep this momentum going.

Our laws are only as good as their implementation by the Administration. That means the EPA needs to finalize the RFS rulemaking and the RFS credit trading program. While I am pleased to see that EPA will be rolling out their rulemaking on September 7th, we have not crossed the finish line yet. We need to get EPA the funding to implement the rule. The Administration requested $11.8 million for the RFS program. Unfortunately, the House and Senate appropriations bill only include $1.4 million and $2.4 million for the RFS program respectively. That is not enough to get this critical program up to full speed.

The RFS is a part of the road map to energy independence, clean air, and thriving rural communities. We need to make sure we follow it by fully funding the RFS program.