NBB Raises the Bar

In the shadow of the Alamo where brave defenders of Texas desperately fought to hold their ground against insurmountable odds, supporters of the biodiesel industry gathered for the National Biodiesel Conference & Expo. Although their struggle isn't as legendary nor their sacrifices as ultimate, a great deal of effort has been exerted by many to move the biodiesel industry to its current production level.
By Susanne Retka Schill, Jan Tellmann and Lindsey Irwin | April 06, 2007
When National Biodiesel Board (NBB) CEO Joe Jobe took the stage to welcome nearly 4,000 biodiesel producers, suppliers and supporters to the state of Texas for the fourth annual Biodiesel Conference & Expo, he dressed the part. "Porter Wagner was having a garage sale, so I thought I'd get into the Texas spirit a bit," he said. It was no accident that the conference was held in the "Lone Star State" as it has the most biodiesel plants and it is the largest biodiesel market in the nation. Not to mention, that in 1863 a battle for Texas independence was fought about 600 yards away from the Henry B. Gonzalez Convention Center in San Antonio, where the conference was held. "Now here we are 171 years later, this fledgling little biodiesel industry, with all our colorful characters, our many stories of persistence and courage and patriotism in our little battle for energy independence," Jobe said. "But in case you didn't notice, our little battle is getting bigger."

To emphasize his point, Jobe announced the NBB's new long-term goal to replace 5 percent of the U.S. diesel market with biodiesel by 2015. Supplementing 5 percent of the 40 billion gallons of on-road diesel would require the production of about 2 billion gallons of biodiesel. That would be a 10-fold increase in production levels in less than 10 years, Jobe said. The 5x'15 is an expansion of the NBB's previous goal of producing 1 billion gallons by 2015. "But then during the subsequent 12-month-period, you guys constructed more than half-a-billion gallons of additional plant capacity, and another couple billion are reportedly in the works," Jobe said. As a result, sales in that time frame tripled from 75 million gallons to about 225 million gallons. "Those kind of expansion numbers demanded that we reexamine our 1 billion by 2015 goal," he said. "For those who might think that 5 percent is not big enough to be relevant, in 2005, the United States refined 1.85 billion gallons of diesel fuel from the crude we imported from Iraq."

Jobe pointed out that the 5x'15 goal would replace about one-fourth of the diesel fuel that the United States refines from the crude oil imported from the entire Persian Gulf region. "That would make a real difference for energy security," he said.

In order for the biodiesel industry to reach the new goal, Jobe outlined four government policy objectives for the 110th Congress, hence the theme of this year's conference "Government Policy." The top priority is the extension of the biodiesel tax credit, which is already being addressed on Capitol Hill. Reps. Kenny Hulshof, R-Mo., and Earl Pomeroy, D-N.D., introduced bipartisan legislation to make the biodiesel tax credit permanent in the opening days of the congressional session.

The NBB is also targeting the Farm Bill. "We will be calling on you in the coming months to reach out to your congressmen to support [Agriculture Committee] Chairman Collin Peterson (D-Minn.), so he can ensure that the energy title includes meaningful things for biodiesel," Jobe said. The NBB supports an extension and modification of the bioenergy program, which provides an incentive for biofuels producers. The NBB will also seek an extension and expansion of the biodiesel education program.

Another issue that the biodiesel industry needs to address is the definition of renewable diesel. "This is a stark example of why government policy matters," Jobe said. "A few powerful oil and gas interests have been applying enormous political pressure to get a broad interpretation of thermal depolymerization and a broad interpretation of the tax credit. The federal government would pay them $1 per gallon for each gallon of palm oil, for example, they could import into their refineries in the Gulf. They are going around Capitol Hill right now convincing people that biodiesel is a thing of the past. What they have is new-generation biodiesel." Jobe argued that such a subsidy for traditional petroleum refiners wouldn't stimulate investment in new plant capacity. It also wouldn't add to the fuel supply, add jobs to the economy, stimulate rural development, nor would it benefit domestic agriculture. "It will cause the federal government to take money from U.S. taxpayers and give it to some of the richest private companies in the world, so that they can put a stranglehold on the raw material supplies of the biodiesel industry," he said.

A fourth priority for the NBB is to develop an Alternative Diesel Standard as part of a joint initiative with the American Trucking Association (ATA). "The ATA is very concerned about the proliferation of state biodiesel blend requirements, but they're willing to strongly support a national biodiesel requirement," Jobe said.

In order to face these challenges, Jobe said the NBB's decision to open an office in Washington, D.C., was a necessity. The NBB is also launching a Political Action Committee (PAC). If every one of the NBB's 400 members could raise an average of $1,000 from among their supporters each year, "we could have a $400,000 PAC," Jobe said. "That would be a respectable-sized size PAC, even by Washington, D.C., standards."

Finally, Jobe urged NBB members to speak with a unified voice. "We will not be effective as a grassroots movement if everyone goes around saying different things," he said. "Public policy matters, and if we expect to effect public policy, we have to be unified in our message."

Enter the Policy-makers
No conference with "Government Policy" as its theme would be complete without a visit from a few influential lawmakers. As members of the U.S. House of Representatives and a rock band, Peterson, Hulshof, Thaddeus McCotter, R-Mich., and Dave Wheldon, R-Fla., served double duty at the event.

As The Second Amendments band, the congressmen entertained during halftime of the Super Bowl party on Sunday. The next day, they participated in a panel discussion revealing their vision for the nation's energy future.

Gene Gebolys, president of World Energy Alternatives and NBB Regulatory Committee chairman was the panel moderator. He praised President George W. Bush for proposing to reduce gasoline usage by 20 percent in the next 10 years. Obstacles will need to be overcome to meet the goals being set by our nation's leaders, Gebolys said. Strong industries are built on strong businesses, and biodiesel business profitability remains a function of agricultural and petroleum prices, and government policies.

He asked the panel about the likelihood of a tax incentive policy being passed this year. With the control in Congress changing from Republican to Democratic, the tax incentive bill's future is an unknown, Hulshof said. He and Pomeroy introduced HR 196, which would make the biodiesel tax incentive permanent. Achieving support for renewable fuel legislation will be an education process, and he urged attendees to participate in the process by contacting their representatives.

"The good thing is that the best cheerleader we have is the president of the United States, a Texas oilman who has been a very enthusiastic supporter of all biofuels," said Hulshof, who farms in southeast Missouri. "If we can get this extension or permanence through the House and Senate, obviously he will sign it."

Peterson, who is chairman of the House Agricultural Committee and has a lead role in shaping the country's agricultural policy, agreed that Americans want renewable fuels legislation. "We are going to write a very significant energy title that's going to move us to new horizons, and getting the tax credits made permanent is critical," he said. He cautioned that there is much work to be done in areas of infrastructure and transportation. One of the big problems is getting the resources necessary to enact the right kind of policy, he said. Congress can start putting that policy together once they know how much they will have to spend, he added. There are other sectors that will be competing with energy for funding. Clearly the bioenergy program has been successful and the congressmen want to extend it, but people want more money for things like conservation and the milk program, which was terminated, he said. "It's going to be a big fight," Peterson said. "We need you to help explain to your members of Congress that the Ag Committee and the Farm Bill need new resources. The first fight will be to get it into the budget."

Although the panelists weren't able to answer Gebolys' question definitively, they were all well-aware of their constituents' desires regarding renewable fuels. The American people want to decrease dependence on foreign fuels and energies, panelists agreed. Weldon, who was just back from the campaign trail, said statements such as, "We need to stop getting our oil from the 'Mideast' and start getting our energy from the Midwest," always drew huge applause. The "600-pound gorilla" driving public policy is public opinion, he said. The public wants to have homegrown American energy sources. His Florida constituents want to end fuel imports from the Middle East and Venezuela, Weldon said. They see the connection between what Venezuelan President Hugo Chavez is doing to undermine democracy in South America and his access to U.S. dollars, and they look at the long-term picture.

McCotter agreed. "We have to defend regimes that are not necessarily friendly to the United States," he said. "Dollars spent on fossil fuels or sent to the Middle East may be used to undermine interests of the United States. Having renewable energies at home is a matter of securing our prosperity and our national liberties."

McCotter is also confident that automobile manufacturers understand that renewable fuels and alternative energy will be the key to employment and prosperity in the Great Lakes area. There is no longer the tension between renewable fuels and the manufacturing community, especially the auto industry, he said. He noted that the Ford Motor Company is working toward hybrid vehicles. "If we continue down this path in Michigan and America, renewable fuels will do in the 21st century what we did for the automobile industry in the 20th century," he said.

Energy: The Issue of Today
To round out its "Government Policy" theme, the NBB invited Mary Matalin and James Carville to give their views on the industry and the upcoming presidential election lineup.

Every married couple has their differences, but there aren't many husband and wife duos who publicly reveal their polarities in the national political arena as do Mary Matalin and James Carville.

Known as the "Ragin' Cajun," Carville is a Democrat who served as chief campaign strategist for the Bill Clinton/Al Gore presidential campaign in 1992 and is one of America's best-known political consultants. Matalin formerly served as assistant to President Bush and counselor to Vice President Dick Chaney. Despite their opposing political viewpoints, they agreed that biodiesel is good for America's energy future.

"What you are advocating is not just good policy-it's good politics," Carville said of biodiesel. "This is something people understand on a visceral level."

In a press conference following the general session presentation, which included their predictions for the upcoming presidential campaign and general views on America's energy future, Matalin emphasized the power of people to make change happen in this country. With issues such as biodiesel, which has garnered a rare popularity among the American public, it gets the attention of those in Washington, D.C., she said. Although Carville believes that biodiesel is still not as largely on the radar of most political decision-makers, he agreed that there is bipartisan support and that it's going to be an important issue moving forward. Usually when an advocacy group asks politicians to do something it's difficult because there are sacrifices that have to be made in the process, Carville explained. In the case of biodiesel, however, politicians are asked to do something for an issue that is wildly popular.

Matalin predicted that alongside healthcare, energy would be the biggest domestic issue in the 2008 presidential election. "This is the right time and the right decision that combines all the people's needs," Matalin said of the common cry for a clean, renewable and sustainable way to have a stable energy system. "When people want something as bad as they want progress in the energy sector, they will get it," Matalin said. "The system works."

Susanne Retka Schill, Jan Tellmann and Lindsey Irwin are Biodiesel Magazine staff writers. They can be reached at [email protected], [email protected] and [email protected] or (701) 746-8385.
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