Washington watch: House bioenergy proposal favorable for biodiesel

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House Agriculture Committee Chairman Collin Peterson, D-Minn., proposed to reauthorize and double funding for the Commodity Credit Corporation's (CCC) Bioenergy Program in the 2007 Farm Bill. This would benefit the soybean and biodiesel industries.

"Chairman Peterson is a true champion of the U.S. biodiesel industry," said American Soybean Association (ASA) President Rick Ostlie, a soybean farmer from Northwood, N.D. "If his proposal is realized in the 2007 Farm Bill, biodiesel made from soybean oil and other domestic feedstocks can play a major role in America's renewable fuel strategy for reducing dependence on foreign oil, cutting greenhouse gas emissions, and strengthening and diversifying our rural economy."

National Biodiesel Board (NBB) Chairman Darryl Brinkmann, a soybean farmer from Carlyle, Ill., added, "Chairman Peterson's initiative would give a real boost to the young U.S. biodiesel industry, helping new plants in rural areas compete with subsidized biodiesel imports and to weather current volatile energy markets."

Peterson included the CCC's Bioenergy Program reauthorization in a draft energy title released in May as part of this year's omnibus Farm Bill legislation. The reauthorization would extend the original program, which was authorized in the 2002 Farm Bill, from 2008 through 2012 and provide a total of $1.5 billion ($300 million per year) in funds to encourage increased production of biodiesel, ethanol and other energy products derived from biomass by U.S.-based companies. This amount is twice the annual funding level of $150 million provided under the previous Bioenergy Program and reflects the growth of domestic bioenergy industries, including biodiesel, over the past five years.

USDA analysis indicates that every 50 million gallons of biodiesel raises soybean prices 1 percent. Last year, the industry produced about 250 million gallons of biodiesel, most of it soy-based.

"The Bioenergy Program is vital for U.S. biodiesel companies who use soybean oil as their primary feedstock, but face increasing competition from imported biodiesel and feedstocks, some of which benefits from significant foreign government subsidies," Ostlie said.

Brinkmann added, "NBB is pleased that Chairman Peterson has also included the Biodiesel Fuel Education Program in his draft energy title. NBB has used these funds on everything from enhancing fuel quality, to increasing the number of petroleum distributors carrying the fuel, to generating positive warranty position statements for biodiesel blends from automakers. We hope that the program can be expanded in the 2007 Farm Bill."