04.10.05

Cantwell Launches 20/20 Biofuels Challenge

Senator Announces New Legislation to Boost America's Home-Grown Fiels to 20 Billion Gallons by 2020

SEATTLE, WA — Senator Maria Cantwell (D-WA) today announced new legislation to boost the United States' production of biofuels to 20 billion gallons by the year 2020. With record-high gasoline prices expected to continue their climb, already over $58 a barrel, Cantwell is calling for an innovative national biofuels strategy.

"Today's record high gas and oil prices only underscore America's need to set some ambitious energy goals," said Cantwell, a member of the Senate Energy Committee. "We need an energy policy that relies on American ingenuity rather than the whims of the OPEC cartel or the Saudi royal family, but we need to make smart investments in home-grown fuels to get there."

Cantwell's "20/20 Biofuels Challenge Act" will invest in new sources of home-grown fuel that can help wean the American economy off its foreign oil addiction. A recent Department of Energy study estimated that America 's dependence on foreign oil will cost the economy more than $150 billion this year—and has cost the U.S. $3.6 trillion since 1970.

Biofuels are liquid transportation fuels such as biodiesel or ethanol, which are produced from plant matter rather than petroleum. They are often blended with traditional fossil fuels, but some vehicles can also run on pure biofuels. The most common source of ethanol is corn, while biodiesel can be produced from vegetable oils, animal fats or even recycled cooking grease.

In 2004, the U.S. produced about 3.4 billion gallons of ethanol, and had biodiesel production capacity of about 150 million gallons. But in order to ramp up production of biofuels and make them an important part of the nation's energy supply, it's urgently necessary to expand the types of crops and materials that can be used. Today, 90 percent of ethanol production is based on corn, and comes from just five Midwestern states. The goal of Cantwell's 20/20 Biofuels Challenge Act is to accelerate the development of new technologies that will allow more efficient conversion of many different materials to biofuels—including rapeseed (canola) and wheat straw, which are grown in Washington state.

"We may sit on just 3 percent of the world's oil reserves, but this country can control its own destiny in the global energy marketplace. And we can do it at the same time we are providing energy security to our consumers and economic security to our agricultural communities," Cantwell said. "The fact is, Washington state is poised to lead the way because we recognize the tremendous opportunity, as well as the importance of moving forward on a smart national biofuels strategy."

Cantwell's legislation will include a number of initiatives to help meet the 20 billion gallons by 2020 goal. It will include a 5-year, $1 billion accelerated pilot program for the Department of Defense to help move forward on biofuels technology. The federal government is the nation's single largest energy consumer, and already military instillations in Washington state—including McChord Air Force Base and Fort Lewis —have alternative fuels programs. But because the technology or infrastructure doesn't yet exist to make the biofuels from Washington-grown crops, the bases must have it shipped in from other regions.

Cantwell's legislation will also extend and expand federal tax incentives for biofuels, and triple current federal bioenergy research and development programs to $500 million per year, with a special emphasis on finding new how-grown sources. The Senator is also exploring new incentives for farmers to grow energy crops, as well as for domestic manufacturers of "total flex" vehicles, which can use any pure or blended fuel from 100 percent bio- to 100 percent petroleum-based fuel.

Cantwell also met today with farmers, leaders in the Washington state biofuels industry, researchers, state and local officials, to hear their ideas for moving forward on a home-grown energy strategy. The group toured Seattle Biodiesel-- Washington state's first biodiesel production facility. In the final stages of permitting, the plant will begin operation later this Spring and may eventually produce up to 5 million gallons of biodiesel annually.

Washington state is one of the top states for biodiesel consumption in the country. In addition, the state consumes about 33 million gallons of ethanol per year.

The Department of Energy's Energy Information Administration (EIA) last week reported that gasoline prices nation-wide had reached an average of $2.22/gallon—up 44 cents just this year. This summer, demand—and prices—are expected to continue to rise. Meanwhile, oil futures have averaged more than $50/barrel so far in 2005 and prices are expected to stay at that level or climb even higher throughout the summer, according to the EIA. Also last week, the International Monetary Fund (IMF) issued a report that suggested oil prices could spike to $100/barrel between now and 2030. "High and volatile oil prices will continue to present a serious risk to the global economy," according to the IMF's World Economic Outlook report. Prices will be pushed upward by increasing demand from China , which is expected to triple its need for oil by 2030.

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