Floor Speech of U.S. Senator Chuck Grassley

Home-Grown Ethanol

Delivered Thursday, December 2, 2010

 It seems like every few weeks or so that there are a lot of misleading and misinformed accusations launched at our nation's renewable fuels producers.  It's impossible to come to the Senate floor and respond to all of them, but sometimes the claims are so outrageous that they require an informed response. So, I'm here to give that response with emphasis upon the words informed.

Earlier this week, a number of my colleagues here in the Senate, including a few of my fellow Republicans, sent a letter to the majority and minority leaders expressing their opposition to extending the tax incentives for home-grown ethanol.  Home-grown means that we're less dependent upon people like Dictator Chavez and the oil sheiks.  My colleagues argued that the tax incentive for the production of clean home-grown ethanol is fiscally irresponsible.  They express their support for allowing the 45-cent-per-gallon credit for ethanol use to expire.  It's important to remember that the incentive exists to help the producers of ethanol compete with the big oil industry, and remember the big oil industry has been well supported by the federal treasury for more than a whole century.

Many of the Republican senators who signed on to that letter have also been leading the effort to ensure that no American sees their taxes go up on January 1, 2011, which will happen automatically if we don't do something this very month.  The largest tax increase in the history of the country can happen without even a vote of the Congress because of the sunsetting law.  And, of course, in that regard, I support the position of my Republican colleagues. But, a repeal of the ethanol tax incentive is a tax increase that will surely be passed on to the American consumer.

I'd like to remind my colleagues of a debate that we had earlier this year on an amendment offered by Senator Sanders.  The amendment that he offered would have, among other things, repealed the $35 billion in tax subsidies enjoyed by oil and gas.  Opponents of the Sanders amendment argued that repealing the oil and gas subsidies would reduce domestic energy production and drive up our dependence upon foreign oil.  Now, opponents to the Sanders amendment argued that it would cost U.S. jobs and increase prices at the pump for consumers. Now, I agreed with the arguments of the opponents.  All of my Republican colleagues and more than one-third of the Democrats did as well.  Thus, Senator Sanders' amendment was defeated.

That majority against the Sanders amendment knew that if you tax something, you get less of it. Repealing incentives on ethanol would have the very same result. Well, guess what?  I know that removing incentives for oil and gas will have the same impact as removing incentives for ethanol.  We'll get less domestically produced ethanol and be more dependent upon those oil sheiks.  But it will also cost U.S. jobs.  It will increase our dependence on foreign oil.  It will increase prices for American consumers.  So whether it's jobs or increased dependence or increasing the price of gas, no American would like that to be the result.

Madam President, we're already dependent on foreign sources for more than 60 percent of our oil needs.  We spend $730 million a day on imported oil.  That money is leaving America for the Middle East and nutty dictators like Chavez.

Why do my colleagues want to increase our foreign energy dependence when we can produce that energy right here at home?

So I'd like to ask my colleagues who voted against repealing oil and gas subsidies but support repealing incentives for renewable fuels, how do you reconcile such inconsistency?

The fact is, it's intellectually inconsistent to say that increasing taxes on ethanol is justified, but it's irresponsible to do so on oil and gas production.  If tax incentives lead to more domestic energy production and the result is good-paying jobs, why are only incentives for oil and gas important, but not for domestically produced renewable fuels?

It's even more ridiculous to claim that the 30 year-old ethanol industry is mature, and thus no longer needs the support that they get, while the century-old big oil industry still receives $35 billion in taxpayers' support.  Regardless, I don't believe we should be raising taxes on any type of energy production or on any individual, particularly during a recession.  Allowing the ethanol tax incentive to expire will raise taxes on producers, blenders and ultimately consumers of renewable fuel.

A lapse in the ethanol tax incentive is a gas tax increase of over five cents a gallon at the pump.  I just don't see the logic in arguing for a gas tax increase when we have so many Americans unemployed or underemployed and struggling just to get by.

On Tuesday this week, all of my Republican colleagues and I signed a letter to Majority Leader Reid stating that preventing a tax increase, meaning mostly income tax increases, and providing economic certainty, should be our top priority in the remaining days of this congress.  I know that we all agree that we cannot and should not allow job-killing tax hikes during a recession. Unfortunately, those members who have called for ending the ethanol incentive have directly contradicted this pledge because a lapse in the credit will raise taxes, costing over 100,000 U.S. jobs at a time of near 10 percent unemployment.  The taxpayer watchdog group, Americans for Tax Reform, considers the lapse of an existing tax credit for ethanol to be a tax hike.

Now is not the time to impose a gas tax hike on the American people.  Now is not the time to send pink slips to more than 100,000 ethanol-related jobs.

A year ago at this time, I came to the Senate floor to implore the democratic leadership to take action to extend expiring tax incentives for the biodiesel industry.  They failed in their responsibility to extend that incentive and provide support for an important renewable industry.   So, while 23,000 American jobs were supported on December 31 last year, nearly all those jobs have disappeared.  An industry with a capacity to produce more than two billion gallons of renewable fuel a year is on track to produce less than 20 percent of that capacity this year.

Ethanol currently accounts for 10 percent of our transportation fuel.  A study concluded that the ethanol industry contributed $8.4 billion to the federal treasury in 2009, $3.4 billion more than the ethanol incentive.  Today the industry supports 400,000 U.S. jobs.  That's why I support a home-grown renewable fuels industry, as I know the Obama administration does as well.  I would encourage anyone who is unclear on the administration's position to contact Agriculture Secretary Vilsack.

I'd like to conclude by asking my colleagues if we allow the tax incentive to lapse from where should we import an additional 10 percent petroleum?  Should we rely on Middle East oil sheiks or Hugo Chavez?

I would prefer to support a renewable fuel based right here at home rather than send it a pink slip. I would prefer to decrease our dependence on Hugo Chavez, not increase it, and I certainly don't want to support raising the tax on gasoline during recession.  I would respectfully ask my colleagues to reconsider their support for this job-killing gas tax increase.

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WASHINGTON, D.C. - Senator Tom Harkin (D-IA) led a bipartisan group of Senators in calling on Senate Majority Leader Harry Reid to include provisions aimed at expanding biofuels markets in energy legislation pending in the Senate.  Additionally, the Senators asked that Leader Reid consider legislation to extend the Volumetric Ethanol Excise Tax Credit (VEECT) beyond its current expiration date of December 31, 2010.  In the letter, the Senators point out that these steps are crucial to reducing the nation's dependence of foreign petroleum, creating jobs in the United States and addressing the issue of climate change.  It is estimated that the enactment of these policies will enable as much as a 5-fold increase in biofuels' displacement of oil-based fuel use in transportation within the next two decades.  Joining Harkin in signing the letter were Senators Christopher Bond (R-MO), Tim Johnson (D-SD) and Amy Klobuchar (D-MN).  A copy of the letter can be found here.

"One of our most pressing energy issues is our continued dependence on imported petroleum for fueling our transportation systems.  On this issue, we are encouraged by the progress that is being made by vehicle efficiency gains and by the increasing contributions from domestic biofuels.  However, we are also deeply concerned that continued expansion of biofuels is being constrained by marketplace limitations," wrote the Senators.  "We therefore urge you to include biofuels market expansion provisions addressing these barriers in energy legislation considered by the Senate."

As the former Chairman and now senior member of the Senate Agriculture Committee, Harkin has been a long-time leader in promoting the production and use of biofuels as an important part of the nation's energy strategy.  Recent Harkin initiatives and actions aimed at promoting biofuels include : 

• On August 4, Harkin led a bipartisan group of Senators in introducing an amendment to the pending energy bill to expand the U.S. biofuels market by increasing the percentage of vehicles manufactured for sale in the U.S. that are flex-fuel capable; increasing the number of blender pumps at refueling stations so more consumers can buy fuels with higher percentages of ethanol; and authorizing loan guarantees for renewable fuel pipelines.  More information can be found here.
• On August 2, Harkin convened a meeting between a bipartisan group of senators and EPA Administrator Lisa Jackson and Department of Energy Deputy Secretary Daniel Poneman to urge prompt approval of E15 ethanol blend for use in all gasoline-fueled vehicles.  At the meeting, Harkin urged for the approval of E-15, as well as E-20, which EPA is also reviewing.  More information can be found here.
• On June 28, Harkin and six other senators wrote to President Obama urging his Administration to move rapidly to integrate biofuels into the nation's transportation fuel supply.  In the letter, the senators expressed concern that the Department of Energy (DOE) had not yet completed testing of higher blends of ethanol in gasoline, which would allow the Environmental Protection Agency (EPA) to approve the use of gasoline containing more than 10 percent ethanol.  More information can be found here.
• On June 23, Harkin spoke on the Senate floor expressing his disappointment in EPA and DOE's delay in making a decision on E-15 and calling for an end to the delay.  Audio of that can be found here.

CHAMPAIGN, Ill. - For many people, autumn weather brings a welcomed time of the year. Adding to the pleasure of the season are the vibrant colors displayed in nature. Leaf pigment, the physics of light, weather conditions, plant species, and geography all play important roles in the color of autumn.
Leaf Pigment and Light

Thanks to the physics of sunlight striking pigments in leaves, we see various leaf colors throughout the year. Leaf pigments play a crucial role in the colors we see. Chlorophylls, carotenoids, and anthocyanins present in a leaf help determine what color the leaf will display.

The pigment that gives leaves their green color is chlorophyll. Chlorophyll is used in photosynthesis which is the process that uses sunlight to transform carbon dioxide and water into carbohydrates (sugars) that fuel tree growth. During the spring and summer, with more hours of sunlight and warmer temperatures, this photosynthetic process is most active thus leaves are green.

The pigment that gives leaves their green color is chlorophyll. Chlorophyll is used in photosynthesis which is the process that uses sunlight to transform carbon dioxide and water into carbohydrates (sugars) that fuel tree growth. During the spring and summer, with more hours of sunlight and warmer temperatures, this photosynthetic process is most active thus leaves are green.

Unlike chlorophyll and carotenoids which are present in leaf cells throughout the growing season, anthocyanins are produced in autumn. Anthocyanins give color to familiar fruits such as cranberries, red apples, cherries, and plums. These complex water soluble compounds in leaf cells react with excess stored plant sugars and exposure to sunlight creating vivid pink, red, and purple leaves. A mixture of red anthocyanin pigment and yellow carotene often results in the bright orange color seen in some leaves.
Weather and Color

Weather conditions that occur before and during the decline of chlorophyll production can affect the color that leaves may display. Carotenoids are always present so the yellow and gold colors are the least affected by weather.

Colors most affected by weather are the red tones created by anthocyanin. On warm sunny days lots of sugar is produced in the leaves. Trees exposed to brighter sunlight generate the reaction between the anthocynanins and the excess sugar creating the bright red hue.

Cooler temperatures cause the veins in the leaves to gradually close preventing the sugars from moving out which preserves the red tones. Thus a succession of warm sunny days and cool crisp nights can paint the most spectacular display of color.

The level of moisture in the soil can also affect autumn color. A severe summer drought can delay the onset of color change by weeks. Ideal conditions for producing the most brilliant colors are a warm wet spring, favorable summer weather, and sunny fall days with the cooler temperatures at night.
Species and Geography

The genetics of different tree species help determine what color the leaves will turn. Color depends on the levels of iron, magnesium, phosphorous, or sodium in the tree and the acidity of the chemicals in the leaves. Some tree species displaying yellow foliage are ash, birch, beech, elm, hickory, poplar, and aspen. Red leaves are seen most often in dogwood, sweetgum, sumac, and black tupelo trees. Some oaks and maples present orange leaves while others range in color from red to yellow, depending on the specific species.

Deciduous forests and trees, with their many broad leaves that change color almost in unison, display the most noticeable fall color. Evergreen species also display fall colors, only slowly and gradually. The appearance of autumn color starts as early as mid September in more northern latitudes and moves southward, reaching its peak in October, but color continues to appear in more southern regions and higher elevations in the west throughout November.

Only a few places in the world have the combination of tree species and climatic conditions necessary for the most vivid fall foliage. Some of the best locations with broadleaved deciduous trees and favorable conditions for brilliant fall color are:

* Northeastern U.S. (New England)
* Southeastern Canada
* Adirondack, Appalachian, Smokey, and Rocky Mountain Regions
* Select areas around Seattle, Portland, and San Francisco.

Remember that cooler, higher elevations will display color before lower, warmer geographic regions.

Even with these facts, the timing, location, and intensity of autumn color are not completely predictable. To truly experience the colorful display, you must be adventurous. There are many states with thousands of scenic byways designed to focus on the palettes of autumn color. So even if you live in a region that does not produce an array of color, take an autumn vacation and explore nearby states that do. For up to date regional information, you may contact the U.S. Forest Service Fall Color Hotline at 1-800-354-4595 or on the internet at http://www.fs.fed.us/news/fallcolors/index.shtml.

The International Society of Arboriculture (ISA), headquartered in Champaign, Ill., is a nonprofit organization supporting tree care research and education around the world. As part of ISA's dedication to the care and preservation of shade and ornamental trees, it offers the only internationally-recognized certification program in the industry. For more information, or to contact a local ISA Certified Arborist, visit www.treesaregood.org.

Funding provided under program Harkin authored in 2002 and 2008 farm bills

WASHINGTON, D.C. - Senator Tom Harkin (D-IA) commended Secretary of Agriculture Tom Vilsack for his announcement today that the U.S. Department of Agriculture (USDA) will provide a total of $31,956,664 in grants and loans for 433 renewable energy and energy efficiency projects in Iowa.  The funding is administered under the Rural Energy for America Program (REAP), which assists farmers, ranchers and rural small businesses in developing renewable energy systems and in making energy efficient improvements in their operations.  Harkin, as the then-Chairman of the Senate Committee on Agriculture, Nutrition, and Forestry, authored REAP in the 2002 farm bill and improved it in the 2008 farm bill.  Harkin is now a senior member of the Agriculture Committee and of the Senate Appropriations subcommittee that funds USDA and rural energy initiatives.

"By helping Iowa's agricultural producers and rural businesses make energy efficiency improvements, today's funding will lower energy costs, help our state to become more energy secure and create economic opportunities for business development.  This is great news for our local and rural economies and will help to spur growth and create jobs across the state," said Harkin.  "I commend Secretary Vilsack and his team for expeditiously executing this program so that it benefits farmers and rural America as intended."

A full list of the recipients of today's funding can be found here.