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Sen. Daschle Moves to Protect Domestic Ethanol Market

August 10, 2004

With the current focus on energy independence, ethanol could have a strong future as a domestically produced renewable fuel, reported on July 27. Senate Democratic Leader Tom Daschle (D-S.D.) has introduced legislation that would prevent imported ethanol from qualifying for credit under renewable fuels standard (RFS) legislation. Implementing an RFS of 5 billion gallons by 2012 is part of various House and Senate passed energy bills. "One of the key reasons to establish a robust RFS is to increase the use of domestic, renewable fuels and Senator Daschle's legislation preserves that goal," said Bob Dinneen, who is the president for the Renewable Fuels Association. "The Daschle proposal will ensure all the ethanol used to comply with an RFS is produced here in the U.S." Enacting an RFS would require petroleum refiners and marketers to gradually increase their use of renewable fuels, like ethanol and biodiesel, to 5 billion gallons per year in 2012. Senate Finance Committee Chair Chuck Grassley also introduced legislation that would prevent an increasing amount of imported ethanol from bypassing the standard import tariff. However, under the Daschle plan, only ethanol produced in the United States would count toward the 5 billion gallon requirement. While petroleum companies would be free to use imported ethanol, it would not qualify toward their RFS obligation. With government support, ethanol could allow the U.S. to lower its dependence of foreign energy supplies. But reliance on imported ethanol the country could cripple the domestic industry, trading one set of foreign energy suppliers for another.
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