Vilsack discusses biorefining industry on Platts
Agriculture Secretary Tom Vilsack spoke about the U.S. biofuels industry on Platts Energy Week Aug. 28. While Vilsack did briefly discuss subsidies for ethanol production, the bulk of his talk focused on our nation’s developing cellulosic and drop-in biofuels industries.
Regarding policy, Vilsack noted that the excise tax credit and tariff system that currently benefit the ethanol industry will likely be eliminated in the future. However, he expressed confidence that the renewable fuels program would continue. “I think what will stay is the renewable fuels standard, which basically is the market for the country to meet a 36 billion gallon threshold by 2022,” he said. “That’s an important threshold. It’s important for us to set a goal; it’s important for us to diversify our energy needs; it’s important for us to reduce our reliance on foreign oil; and it’s important for us to create jobs.”
While the RFS2 essentially limits corn ethanol production to 15 billion gallons, Vilsack said that the USDA has been actively been using some of its resources to encourage convenience store owners and petroleum marketers to install blender pumps. The department has also encouraged the U.S. EPA to continue its efforts to promote E15, Vilsack said. Those measures are needed to ensure the U.S. can actually meet the 36 billion gallon goal.
Vilsack also spoke about the USDA’s focus on research and the development of alternative feedstocks. The Energy Title of the Farm Bill, he said, provides USDA with programs to support the development of biorefineries and biomass crops. In addition, the USDA recently announced a partnership with the U.S. DOE and Navy to create an opportunity for aviation and marine drop-in biofuels production. Vilsack estimates that the $510 million in funding the three groups are able to leverage will support the development of four or five new biorefineries. “It’s a new, creative way to help this industry, generally,” Vilsack said. “I’m excited about it. I’m excited about what our research is doing across the country. I’m excited [about] what I’ve seen…I think we are at a tipping point of a new day in energy in this country.”
In addition, Vilsack stressed that the USDA’s support is about more than just biofuels and ethanol. “It’s about jobs in rural America,” he said. “It’s about energy security. It’s about national security. It’s a pretty important topic, and one that doesn’t often get as much attention as it needs.
Vilsack estimates that we will see commercial-scale biorefineries that were supported by the USDA begin to come online in the 2012-‘13 time frame. “When you see that, you’ll begin to create greater efficiencies,” he said. “You’ll begin to see markets expand.” Vilsack also addressed the relatively short timeframe we have in order to achieve the goals of the RFS. “I know there is a lot of reluctance to buy into the notion that we are going to get there that quickly,” he continued. “Here is what I think is going to happen. I think we are all of a sudden going to wake up one day and see a number of these biorefineries around the country, and say ‘hey, where did these come from?’”