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Grassley Q & A:

Green Energy and Jobs

July 22, 2010
Dysart Reporter


Senator Charles


Q. You recently introduced the GREEN Jobs Act. What's your motivation?

A. I introduced the GREEN Jobs Act in April, with Senator Kent Conrad of North Dakota, to try to prevent ethanol from being dealt the same blow that was levied against biodiesel in 2009. Despite widespread political support for the biodiesel tax credit, Democratic congressional leaders held its extension hostage to controversial agenda items. As a result, the biodiesel tax credit, which could and should have been extended without any problems, expired at the end of 2009. The credit still hasn't been reintroduced, despite the importance of developing green energy sources and creating green-energy jobs. The consequences have been devastating. An estimated 29,000 biodiesel-related jobs were lost last year due to uncertainty. This year, another 18,000 biodiesel jobs have been lost, and the remaining 5,000 are in jeopardy. In 2009, there were biodiesel jobs in 44 states. Now, biodiesel production is nearly shut down, severely limiting the development and availability of a promising alternative fuel for transportation.

So, I'm working to keep the tax incentives for ethanol in place, most of which are scheduled to expire at the end of this year. The bipartisan Grassley-Conrad GREEN Jobs Act would extend, through 2015, the ethanol blenders' tax credit (which is the volumetric ethanol excise tax credit, or VEETC), the small ethanol producers tax credit, the cellulosic producers tax credit, and the ethanol import tariff. These credits and the tariff are currently set to expire on December 31, 2010, except for the cellulosic producers tax credit, which is set to expire on December 31, 2012.

Q. Why are these extensions necessary?

A. The United States sends $300 billion a year to foreign countries to satisfy our dependence on oil. We rely on foreign countries, often countries who don't like us, for fossil fuels.

Biofuels offer an alternative to foreign oil and generate economic activity in the United States. Today, ethanol comprises nearly 10 percent of the U.S. transportation fuel supply. Corn ethanol is the only renewable fuel that is substantially displacing crude oil and working to reduce U.S. dependence on oil. Ethanol produced in the Midwest replaces oil from places such as Saudi Arabia, Venezuela and Nigeria.

Q. What will happen if these extensions fail?

A. Ethanol is good for rural economies, and a recent study found that failure to extend the VEETC credit and the secondary tariff would result in the loss of 112,000 jobs nationwide and reduce ethanol production by nearly 40 percent. Remember what happened as a result of Democratic leaders in Washington letting the biodiesel tax credit lapse last year. There were 52,000 jobs in the biodiesel industry in 2008. Today only about 5,000 are left, and they are in jeopardy.

Failure to pass these effective tax incentives for proven renewable energy sources like ethanol and biodiesel means catastrophic job losses, lost opportunities for future energy needs, more U.S. dollars sent to foreign countries instead of spent here at home, and heavier pollution due to fewer cars running on ethanol blended fuels. I won't stop pressing the leadership of Congress to get these tax extensions taken care of. They have the power to do so, and it's time to stop making excuses.



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