07/11/07 Looking At The New Energy Bill

New Energy Bill. I'm Greg Martin with today's Line On Agriculture. One of the key issues that the Senate has been able to come to an agreement on, unlike the immigration issue, is a new energy bill. The bill is being hailed by Senators as a bill that will save consumers money, protect them from gas price-gouging, create new jobs and make our country safer - all while taking steps to reduce global warming. One of the organizations that keep tabs on things like this for the Ag industry, American Farm Bureau is also applauding the bill. AFBF Energy Specialist, Anne Steckel talks about how the new energy bill is different from the 2005 energy bill. STECKEL: This legislation really looks at a lot of different renewable fuels, it examines efficiency standards, it examines price gouging and it examines an increase in the renewable fuels standard which we did do last energy bill but this is a very forward thinking energy bill in that we built in a cellulosic ethanol renewable fuels standard within the traditional RFS. That's all well and good but the Ag industry wants to know how it's going to affect them. Steckel describes provisions in the new energy bill that would benefit agriculture. STECKEL: This is a very good bill for agriculture because it does include a renewable fuels standard and it's a very ambitious renewable fuels standard but a very attainable renewable fuels standard. Like I said, it does build in a very specific cellulosic ethanol reserve component of the renewable fuels standard  it goes from 8.5 billion gallons in the year 2008 and escalates up to 36 billion gallons but the cellulosic reserve starts in the year 2016 at 3 billion gallons so with a guaranteed market for cellulosic ethanol, the thought is that the marketplace investors and the technology will come along as well to make that a commercially viable alternative. The ethanol industry is being blamed for higher prices across the board. The "food vs. fuel" issue will continue to be debated for some time but Steckel says that an increase in ethanol production won't affect food prices. STECKEL: Corn prices had gone up and now their coming back down again and what we've seen is that we've heard a lot of talk about how there might be a "food vs. fuel" issue and our economists ran a lot of the numbers because as a general farm organization, we have those concerns as well. And what our economist found is that we will have enough corn to around and that the prices will stable out and the market will adjust. AFBF points to an early freeze that damaged fruit and vegetable crops, low world supplies of wheat, milk producers' cutting back on production in response to last year's low prices and the rising cost of energy. That's today's Line On Agriculture. I'm Greg Martin on the Northwest Ag Information Network.