NBB In Sight

President's message indicates future biodiesel success
By Joe Jobe | June 01, 2006
In March, the National Biodiesel Board (NBB) opened its Washington, D.C., office in order to add resources and visibility to biodiesel's role in government affairs. Timing for this move could not have been better. Rising fuel prices elevated energy to the top of the list of election-year political issues. As average gasoline prices topped $3 per gallon in Washington, D.C., the last week of April brought a flurry of activity for renewable fuels.

President George W. Bush gave a widely covered energy speech at the Renewable Fuels Summit, where he spoke of the need to further the nation's commitment to ethanol and biodiesel. Following the president, DaimlerChrysler CEO Tom LaSorda gave a speech emphasizing his company's plans to step up production of E85 vehicles and light-duty diesels, highlighting the success of the Jeep Liberty's B5 factory fill. He also mentioned DaimlerChrysler's approval of B20 for fleets and the company's commitment to B20 for individuals in the near future. Following LaSorda, Renewable Fuels Association President and CEO Bob Dinneen and I cohosted a panel discussion with members of Congress, who spoke about the country's need to do more to promote renewable energy. Momentum was beginning to build for new energy legislation.

The next day I had the opportunity to tell the Senate Agriculture Committee what our industry will require to keep this momentum going. Submitting testimony on behalf of the biodiesel industry at a hearing called to report on the status of the biofuels industry, I highlighted three major federal policy measures that have contributed to biodiesel's strong success. However, all three are scheduled to expire soon and must be continued to keep the renewable fuel's growth going strong: 1) the biodiesel blender's tax credit, 2) the Bioenergy Program, and 3) the Biodiesel Fuel Education Program.

The testimony outlined how the biodiesel blender's tax credit has been the primary stimulant for the growth of biodiesel in 2005, and is the cornerstone to biodiesel's continued success. The Bioenergy Program has been critical in the expansion of domestic capacity, bringing new jobs to our manufacturing sector and opportunities to rural areas. Finally, the USDA Biodiesel Fuel Education Program has been important in supporting the NBB's fuel quality efforts, and original equipment manufacturer (OEM) and petroleum outreach activities.

The NBB has submitted a proposal to the USDA, proposing modifications to the Bioenergy Program going forward. A 2005 Office of Management and Budget (OMB) evaluation reported that the program has been effective in stimulating biodiesel growth. Currently, the program is scheduled to expire in July. Further, the biodiesel industry is still immature, and the USDA education program is very much needed to continue its current success.

In my testimony, I said, "During the 2006 State of the Union speech, President Bush outlined his Advanced Energy Initiative, which stated the goal of reducing petroleum imports from the Middle East as much 75 percent by the year 2025. Biodiesel and ethanol can be the first tools used to begin reaching that goal. As an illustration of how biodiesel can play a role in that effort, please note that Iraq is the second-largest provider of crude oil into the United States from the Persian Gulf region. Of the crude that comes from Iraq, approximately 1.85 billion gallons of diesel fuel is refined for the U.S. market. If long-term America was to replace 5 percent of its 37 billion gallons of on-road diesel fuel with biodiesel, it would equal 1.85 billion gallons-the same amount of diesel fuel that we get from Iraq."

In addition to the three policy measures specifically highlighted in the testimony, the NBB is working from a long list of legislative, appropriations and regulatory/implementation issues as approved by the NBB Regulatory Committee.

This list includes such things as:
>Implementation of recommendations from the NBB's Alternative Diesel Standard task force
>Key appropriations such as the Biodiesel Engine Testing Program, authorized by the Energy Policy Act of 2005
>Input on the rulemaking process for issues pertaining to biodiesel, such as the renewable fuels standard, ULSD rule, mechanical dye regulations and liquid underground storage tanks
>Alternative fuel infrastructure tax credit implementation and reauthorization
>Small producer income tax credit implementation and reauthorization
>Multiple other issues

These landmark issues will serve as a roadmap to the NBB in the coming months. We will continue our work to reduce barriers and encourage growth in an industry becoming evermore important to our nation's future.

The testimony in its entirety can be viewed at www.biodiesel.org. NBB Director of Governmental Affairs Scott Hughes can be contacted in our Washington Office at (202) 756-4592 or at [email protected] Likewise, Alan Weber has moved to Washington, D.C., temporarily to help launch the office and can be contacted at [email protected] Mark Palmer of Gordley Associates remains a key member of the biodiesel regulatory team and can be reached at [email protected] Other members of the Washington, D.C., team include Tim Urban of Washington Council Ernst and Young, Karen Edwards of KCE Communications and Janet Kopenhaver of AgSource.
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