NBB testifies to House committees, shares survey results on renewable diesel

By | May 25, 2007
Scott Hughes, National Biodiesel Board (NBB) director of governmental affairs, and NBB CEO Joe Jobe recently testified before House committees. Hughes addressed the House Committee on Energy and Commerce Subcommittee on Energy and Air Quality on biodiesel's impact on energy security and other societal benefits. Jobe testified before the House Committee on Small Business in a hearing titled, "The Impact of Renewable Energy Production in Rural America." Their testimonies addressed the many benefits of biodiesel, including the ways in which the biodiesel industry has more than paid for its federal tax incentive through economic stimulation. Both men primarily spoke on the importance of extending the biodiesel blenders tax incentive. "It has stimulated this industry in every way we imagined," Jobe said of the incentive. He noted that the industry produced 25 million gallons of biodiesel in 2004. Production has grown by a factor of 10, to about 250 million gallons of biodiesel in 2006. There are more than 100 plants operating today, a four-fold increase from when the tax incentive took effect.

Jobe and Hughes also addressed the threat of the over-subsidization of some large integrated oil companies due to the recent broad interpretation of "renewable diesel" by the Internal Revenue Service. The ruling means fuel made by coprocessing biomass with petroleum in conventional refineries can claim a tax credit of $1 per gallon, the same as the biodiesel tax credit. "Some have argued that anything that displaces some imported crude oil is a good thing, and that Congress should not pick winners and losers," Jobe said. "But, subsidizing large integrated oil companies a dollar per gallon for their existing refinery capacity by exploiting an ambiguity in the tax code will indeed pick winners and losers. The winners will be the oil companies that will receive windfall profits in a way that will not add significant refinery capacity or economic benefits to the country. The losers will be small businesses that have invested in their communities to build new biodiesel refinery capacity. The other losers will be the U.S. taxpayers who will foot the bill for this flawed policy."

Jobe presented survey results from Moore Information, in which taxpayers were asked whether oil companies should benefit from the same level of government support for renewable diesel as for biodiesel. By a margin of 3:1, Americans said that of the two fuels, only biodiesel deserved that level of government support. Almost eight of 10 Americans said Congress' decision to provide a tax incentive for biodiesel was a good one.

Also on Capitol Hill, an NBB member testified before the Senate Agriculture Committee with views supported by the American Soybean Association and the NBB. The testimony called for the new Farm Bill to contain specific biodiesel provisions, including a Biodiesel Incentive Program and Biodiesel Fuel Education Program. The measures will help to strengthen the nation's energy policy, according to Neil Rich, president and CEO of Riksch BioFuels in Crawfordsville, Iowa.
 
 
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