President Obama is delivering a speech this morning outlining his administration’s domestic energy goals, which may have a significant impact on Nebraska.
U.S. Secretary of Agriculture Tom Vilsack says the president is pushing for increased production and use of plant-based biofuels so the U.S. can be more “self-reliant.”
“That’s a value system that folks in rural America understand very well,” Vilsack says. “To do that, you’ve got to build an infrastructure. You’ve got to, obviously, look for new opportunities for oil and natural gas in the United States which the president will acknowledge.”
“You have to look at alternative energy sources, renewable energy: wind, solar, hydro, and — yes — nuclear, if it’s safe. And at the same time you need to create new opportunities for a biofuels industry that really does help provide us less reliance on imported oil.”
President Obama says the country has to find “better and smarter” ways to produce energy and Obama says within the next two years he’d like to see construction begin on four new advanced biofuel plants in the U.S. that would use wood chips, switch grass or plant waste rather than corn to make ethanol. Vilsack says those plants would “no doubt” be located in other parts of the country.
Nebraska is the nation’s number-two ethanol producer. “To continue to have a thriving ethanol industry, there has to be national support for that industry and in order for there to be national support we have to make sure that there are opportunities in other parts of the country to produce ethanol and see the benefits of ethanol,” Vilsack says.
So-called “cellulosic” ethanol plants that use corn stalks, switch grass or other plant materials cannot today match the volume of ethanol that corn-based plants are able to produce, partly because of the vast amount of plant waste that must be used to make a gallon of ethanol.
Vilsack says not only is increasing plant-based ethanol production about reducing dependence on foreign oil, it’s about creating jobs in rural America.
“The nature of these biorefineries is different from oil refineries where you can have one large structure that basically services several states and only one state gets the benefit,” Vilsack says. “The biofuel industry, because of the bulk associated with feed stock, biorefineries are smaller in size, but they have to dot the landscape every 150-200 miles, so this is a real opportunity for us, I think, to have a real revitalization and resurgence in rural economies across the country.”
According to a White House “fact sheet,” President Obama will “look for ways to reform our biofuels incentives to make sure they meet today’s challenges and save taxpayers money.” According to Vilsack, that does not mean an immediate end to tax breaks for ethanol and biodiesel.
“We saw what happens when you abruptly end incentives and support for a fledgling industry with the biodiesel tax credit that was not allowed to continue for a period of time last year and the result was that industry lost half of its production and 12,000 jobs,” Vilsack says. “So I think the president understands and appreciates that instead of a cliff in terms of these incentives, we need to develop a glide path.”
Vilsack says that means phasing-out tax breaks for ethanol and soybean-based biodiesel “over time” and making more federal investments in things like pipelines and blender pumps to make biofuels “more convenient for consumers.”
Vilsack is a former governor of Iowa, the nation’s number-one ethanol producer.