While some fear a threat to Nebraska’s biofuel industry may be looming, U.S. Agriculture Secretary Tom Vilsack says he’s confident Congress will act quickly to extend a key tax incentive for soybean-based bio-diesel fuel early in the new year.
“We’re obviously encouraged by comments from congressional leaders that it’s their intention to take this matter, the tax extenders, up by the end of next month which will hopefully be in time that there isn’t any significant disruption in the market,” Vilsack says.
The tax credit is set to expire at the end of this year and supporters say without it, petroleum marketers will be unwilling to purchase the more expensive biodiesel and demand for biodiesel will evaporate. Some industry analysts predict many biodiesel plants will be forced to shut down next week.
The biodiesel tax credit was enacted in 2004 and, in October 2008, it was extended ’til the end of this year. “Within the Obama Administration, the president tasked myself, (Energy) Secretary (Stephen) Chu and (EPA) Administrator (Lisa) Jackson to put together a task force report on biofuels generally which we will probably be issuing next month — (outlining) ways in which we can be even a better partner with the industry than we’ve been. You know, I think we’re going to see a significant emphasis on biofuels, on second and third generation feed stocks,” Vilsack says. “This is an exciting new opportunity for America.”
For example, a byproduct of ethanol production is distiller’s grain, which is sold as livestock feed. Vilsack says he recently visited a facility in southern Virginia where the manure from a dairy operation was being converted into ethanol.
“And then the byproduct of that process is a thing called ‘BioChar’ which can be applied as a…not-petroleum-based fertilizer to certain crop ground and that in turn could eventually qualify for offsets under any kind of Clean Energy legislation so there are just enormous new opportunities here for, I think, a renewal of the rural economy, generally, in the country,” Vilsack says. The ag secretary says if it’s “appropriately crafted,” an energy bill can be an income boost for farmers through the so-called “cap and trade” process.