Senator John ThuneSouth Dakota is leading the way in reducing America's dependence on foreign oil through the production of homegrown ethanol. With 12 ethanol plants already in existence and five more under construction or expansion, South Dakota's corn-based ethanol industry is growing at a record rate.
Because corn is also used as a food and feed source, the production of corn-based ethanol will eventually be limited to roughly 15 billion gallons of ethanol per year. However, this production "wall" doesn't mean ethanol production needs to stop. Thanks to new technology and research, a new generation of ethanol is being developed that could supplement corn-based ethanol production and further reduce our nation's dependence on foreign oil.
I recently introduced bipartisan legislation with Senator Ben Nelson (D-NE) that would spur the production of cellulosic ethanol, an alternative fuel produced from homegrown crops like corn stover, wheat straw, switchgrass and wood chips. My bill, the Biofuels Innovation Program Act (BIP), takes a two-pronged approach to assist farmers and ranchers with the transition to biofuels production.
First, the BIP proposal would allow for feasibility studies to be conducted to establish BIP project areas on land surrounding future biorefinery sites. These studies would evaluate the likelihood of construction of a future biorefinery; the local potential for production of biomass resources, such as switchgrass and fast-growing trees; the number of interested producers; and the economic impact a future biorefinery would have on the local community.
Once a BIP proposal is approved by the USDA, participating producers could enroll eligible land in the BIP program. During the first five years of their BIP contract, producers would receive a cost share for planting energy-dedicated crops and a per-acre rental payment. Once the biorefinery is operational, the rental payment would end and the producer would receive a matching payment up to $45 for each ton of biomass delivered to the biorefinery for up to two years.
Secondly, this legislation also authorizes matching payments on a per-ton basis to producers anywhere in the United States who sell crop by-products and residues such as corn stover and straw to biofuels facilities for the production of ethanol or other alternative energy. These matching payments may be made for up to two years beginning with the date the biofuels facility begins purchasing the feedstock, and are also capped at $45 per ton.
This bill also goes to great lengths to create and protect habitat for wildlife. For example, it would require an adequate amount of switchgrass and other crops to remain in the field after harvest. This would provide good habitat for pheasants and other wildlife, as well as fight against soil erosion.
The purpose of my legislation is to spur the construction of biorefineries across South Dakota and the country and provide incentives to farmers in surrounding areas to grow energy dedicated crops that can eventually supply these biorefineries in a cost-effective, environment-friendly way.
If we are going to be serious in this country about reducing our dependence on foreign oil, we have to be serious about giving the necessary jumpstart to America's budding alternative fuels industry and the farmers who will be expected to fuel it, so they can overcome initial economic and technical hurdles and transform this infant industry into the future answer to America's energy needs.