Peterson sees growing role for farm-made fuels; discusses Farm Bill
“We need to get off foreign oil, however the heck we do it,” said Peterson, D-Minn., during a talk Monday in Renville. He spoke during a discussion on the 2007 farm bill at an event hosted by Renville County Pro Ag to promote value-added opportunities in agriculture.
The agriculture chairman said he’d like to see the federal government adopt Minnesota’s requirement that utilities raise the amount of renewable fuel in their energy mix from 10 percent to 25 percent by 2025. Peterson has no direct control over energy policy, but his role as House agriculture chairman provides some opportunities to promote renewable energy in the 2007 farm bill.
The country’s corn-based ethanol production is already doing well, according to Peterson. He believes the government’s best role is “get out of the way” and “not damage what we’ve got going” when it comes to this industry.
He wants to see $5 billion to $6 billion included in the farm bill to support the development of feedstocks, such as switchgrass and other biomass, for cellulosic ethanol. Peterson said it is important to develop feedstocks appropriate for every region of the country so that ethanol production can expand beyond the Midwest.
There has been only limited research into developing the best feedstocks, or addressing the complicated issues of harvesting, storing and transporting them. Peterson wants to provide grants for farmers to raise different feedstocks and to develop the infrastructure to make cellulosic ethanol a viable, commercial enterprise.
His challenge will be finding the money. The Congressional Budget Office is predicting that the federal government will be able to reduce its support for farm commodities by $60 billion over the next 10 years. Consequently, the money available for the farm bill is reduced by that amount.
“Pay Go” legislation that Peterson has championed also requires that any new spending be offset by a reduction elsewhere, or new sources of revenue. Peterson said these two factors will make it difficult to find the $5 billion to $6 billion in he’d like to see earmarked for cellulosic ethanol development.
There are other challenges too, including one Peterson pointed to in the White House. He said President George Bush is looking for ways to allow Brazilian ethanol into the U.S. “This is a bad idea,” said Peterson.
He said there is also pressure from what he described as the “big guys” or large, international corporations to make ethanol a world trade commodity. He voiced his suspicion that the motive is to take ethanol production away from the local and farmer-owned entities used in Minnesota, and put it in the hands of large corporations.
Domestic ethanol is protected from imported sources by a 54-cent-a-gallon tariff. The tariff is in accordance with the World Trade Organization agreements, according to Peterson.
He is concerned about the $1-a-gallon tax credit now provided for biodiesel production. There are various bills that would extend the credit beyond its 2008 expiration. Peterson said biodiesel needs the credit for its economic viability, and a long-term extension is essential to attract capital for biodiesel development.
