Memo to Congress and candidates: American biofuels boost job creation

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This tremendous growth has stimulated job creation. In 2010, the industry directly employed more than 70,000 workers in the production of ethanol and feedstocks and indirectly supported another 330,000 workers in agriculture, construction, research and development, and other sectors. These are good jobs: a 2010 Ethanol Producer Magazine survey found that 83 percent of the industry’s employees reported earning at least $40,000 per year, and 99 percent reported receiving health care and other benefits.

Clearly, the biofuels boom has brought meaningful economic opportunity and job creation to the Midwest in recent years. As the industry grows beyond its Midwestern roots, there is great potential for new employment opportunities and economic development in other regions.

But these potential jobs – and tens of thousands of existing jobs -- are threatened by vacillating support for renewable energy in Washington, D.C.  For the biofuels industry to build upon its successes, the nation needs a bold action agenda to create and preserve good-paying jobs producing clean-burning, American-made fuels.

Strengthen the commitment to American-made fuels: With the 2007 Energy Independence and Security Act, Congress and the President committed the nation to bolstering energy security.  A central provision of the law, the Renewable Fuels Standard (RFS), which requires the use of 36 billion gallons of renewable fuels by 2022, has been a resounding success. Already, the RFS has played a significant role in reducing oil imports. In 2010 alone, U.S. ethanol production replaced the amount of gasoline refined from 450 million barrels of crude oil—roughly the amount that we import annually from Saudi Arabia. To maximize the energy security benefits of domestic biofuels, our nation’s leaders need to re-commit themselves to maintaining the RFS and rejecting efforts to repeal or reduce this important policy.

Modernize America’s fueling infrastructure:  Like our roads and bridges, America’s fueling infrastructure is aging and focused on last century’s technologies.  Investments must be made in fueling infrastructure that gives American drivers a choice at the pump.  Tax incentives for new fuel pumps that can offer a wide range of choices, including ethanol blends of 10 to 85 percent, would create jobs by expanding the market for domestic renewable fuels.  Expanding the market through modern fuel infrastructure is critical to the success of the federal RFS and the commercialization of advanced and cellulosic ethanol and other next generation biofuels.  

Transform America’s energy tax policy: Our nation’s energy tax policy should be focused on the future, not the past. Rather than continuing to support mature energy technologies like oil and gas, tax incentives should focus on stimulating the development and commercialization of new domestic energy sources like cellulosic ethanol. While the first generation of ethanol, produced from grain, can now stand on its own without tax incentives, the nascent next-generation ethanol industry requires continued support to ensure it reaches its full potential.

Ethanol from cellulosic sources—such as forestry residues and municipal waste—is nearing commercialization. However, continuance of the cellulosic ethanol producer tax credit and other federal programs will be necessary to attract and maintain the private investment needed to broadly commercialize the next generation of biofuels. Meanwhile, mature technologies such as oil and gas have proven they don’t need taxpayer support to thrive in the marketplace. Tax incentives and subsidies currently received by the oil and gas industry should be re-directed to stimulate growth in new, cutting-edge energy technologies.

Make no mistake: With a strong commitment to the U.S. ethanol industry, the nation can continue to produce clean-burning, American-made fuels – and create and keep good-paying jobs.

Bob Dinneen is president and CEO of the Renewable Fuels Association, the trade association of the U.S. ethanol industry.