Congress Moves Toward Doubling Ethanol Use

The U.S. Senate’s Energy and Natural Resources Committee approved a bipartisan amendment during the markup of comprehensive energy legislation to enact a historic 8 billion gallon Renewable Fuels Standard (RFS), a move expected to make domestic ethanol fuel more readily available for motorists in the years to come.

Led by Senators Jim Talent (R-MO), Tim Johnson (D-SD), and Byron Dorgan (D-ND), the amendment would more than double the current ethanol market to require at least 8 billion gallons of ethanol to be used by 2012. The legislation sets forth a schedule for the increasing use of renewable fuels, beginning with 4 billion gallons of ethanol use in 2006 and increasing to at least 8 billion gallons of ethanol use by 2012. The original RFS, introduced four years ago, called for 5 billion gallons of ethanol to be used by 2012. With ethanol production in the U.S. increasing at a rate of over 600 million gallons per year and the industry poised to make 4 billion gallons by 2006, enacting a more ambitious schedule for ethanol demand will better reflect the current growth of the industry. “We are gratified that members of Congress have recognized current ethanol production outpaces the previous RFS proposal by adopting a new and improved eight billion gallon RFS in the Energy Committee,” said Brian Jennings, Executive Vice President of The American Coalition for Ethanol (ACE). ACE led a summit in December of 2004 to discuss the need to increase the RFS baseline number to better reflect actual production. More than 30 members of the U.S. ethanol industry were represented at the meeting, and all agreed to support increasing the RFS to 8 billion gallons. A recent Consumer Federation of America study found that blending 10 percent ethanol into gasoline could reduce prices at the pump by as much as 8 cents per gallon. “The bottom line is that blending cost-effective ethanol with high-priced gasoline will bring down the overall cost of the fuel for consumers,” Jennings added. “American motorists deserve relief from record high pump prices. Ethanol can play a key role in expanding the nation’s fuel supply and protecting against the kind of price spikes that come from being overly dependent on one source of energy.”
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