Hearings - Statement
Statement of James M. Inhofe
Hearing: Full Committee Hearing
Oversight on Federal Renewable Fuels Programs
Wednesday, September 6, 2006

· The purpose of today’s oversight hearing is to review federal renewable and biofuels programs. Our witnesses come from the three key agencies – USDA, DOE, and EPA – that have jurisdiction over the subject.


· This is the first of what will be a series of hearings on renewable fuels, especially given the level of bi-partisan interest in the topic and EPA’s continued work on the renewable fuel standard implementation.

· It seems that in recent months traditional opponents to renewable fuels, particularly those on the other side of the aisle, have had a change of heart and now can be found on the stump exclaiming ethanol’s virtues. I am hopeful that they will take the time to study the issues fully and not just declare populist and politically expedient messages.

· Without regard for the reason, I am pleased to see that they have chosen to support the President’s biofuels initiatives.

· This Committee has principle jurisdiction over motor fuels policy including renewable fuels. I would like to remind my colleagues that the bill that passed this committee, S. 606, provided the foundation for the fuels title in the Energy Bill. Similarly, any future changes to the renewable fuel standard must come through our committee to ensure consistent, flexible, and efficient national policy.

· In preparing for the 2007 Farm Bill, USDA issued a theme paper last month on Agriculture and Energy. In listing possible options, the USDA acknowledged “it is unclear how expansive energy provisions could be in the Farm Bill” since “suggestions requiring legislation may not be under the jurisdiction of the agriculture committees.”

· It is also critical that we consider effects on other industries before legislating in the renewable fuels arena. Using corn for fuel and feed impacts other agricultural interests like hog and cattle producers.

· Further, it could also have serious impacts on consumers. Some proponents have suggested increasing the current 7.5 billion gallon renewable fuel standard to 10 or 12 billion gallons or more. However, a recent study showed that food prices would cost consumers an additional $14.5 billion per year at the 10 billion gallon level and $20.3 billion per year at the 12 billion gallons.

· Several politicians, including the President, and other interest groups have stressed the security implications of importing oil from unstable parts of the world. Yet, corn cannot be the answer.

· Even under the most extreme hypothetical - if the entire 2005 corn production of 11.1 billion bushels were dedicated to ethanol, the resulting 30 billion gallons of ethanol would represent only 14.5 percent of gasoline use (Congressional Research Service).

· Corn ethanol proponents must understand that natural gas is a key feedstock in ethanol production. Therefore, policymakers could de facto substitute foreign oil for foreign natural gas. Continuing my earlier example, processing the entire 2005 corn crop of 11.1 billion bushels into ethanol would be approximately 1.5 trillion cubic feet of natural gas. Total U.S. natural gas consumption was 22 tcf in 2005 (CRS).

· That said, there are certain bright spots on the horizon when it comes to renewable fuels. Cellulosic biomass ethanol could be an important part of addressing domestic transportation fuel needs.

· If commercially developed, this technology could produce new bioenergy crops that do not compete with food and feed. Further, many of these crops are perennials and can grow on marginal lands across the country.

· I am proud to say that some of this research is conducted in my home state by the Samuel Roberts Noble Foundation of Ardmore, Oklahoma – an organization founded by oilman and philanthropist Lloyd Noble. The Foundation is involved in vital research to both increase potential energy crop yield and reduce the biological barriers that increase costs for bio-refiners.

· This committee is familiar with cellulosic biomass ethanol – again, S. 606, the bill that became the renewable fuel standard included a loan guarantee provision to build commercial scale facilities.

· I look forward to hearing from our distinguished panel of experts and asking questions.


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