Daschle-Lugar Renewable Fuels Bill

April 2, 2001

Senate Democratic Leader Tom Daschle (SD) and Senate Agriculture Committee Chairman richard Lugar (R-IN) have introduced a bill designed to triple the nation's use of ethanol over the next decade, reduce the nation's dependence on foreign oil and result in hundreds of millions of dollars in increased demand for farm products in South Dakota, Indiana and across the country.

The bill creates a nationwide renewable fuels standard (RFS) and allows states to address serious groundwater contamination problems by phasing out MTBE (methyl tertiary butyl ether)over the next four years. The bill will reduce emissions of greenhouse gases, diversify our domestic liquid fuels production base, and promote investment and job creation in rural communities.

"We are now at a critically important time in the debate over energy policy in this country," Daschle said. "Americans are feeling the effects of high oil and natural gas prices and many farmers are struggling to make ends meet. This bill makes substantial steps toward addressing both of these problems. The nationwide renewable fuels standard, coupled with the current reformulated gasoline oxygen requirement (RFG) will triple the demand for ethanol over the next 10 years. This will mean hundreds of millions in increased farm incomes as well as billions saved on foreign oil purchases."

"The Renewable Fuels Act of 2001 will be good for our economy and our environment," Lugar added. "Most importantly, it will facilitate the development of renewable fuels, a development critical to ensuring national and economic security and gas price stability."

A minimum percentage in the RFS would be created to include renewable fuels in all motor fuel sold in the United States. This minimum percentage would increase yearly over the next 10 years, leading to the tripling of ethanol demand. Daschle and Lugar said that, according to USDA estimates, this tripling of ethanol demand would increase U.S. farm incomes by an average of $1.3 billion each year as well as saving the country over $4 billion annually in imported oil.

"The security of our whole economy revolves around our over-dependence on energy sources from the unstable nations of the Middle East," Lugar said. "We must be able to address this challenge. Finding an environmentally sensitive way to promote the use of renewable fuels is an important part of this challenge."

This bill will also keep in place the current reformulated gasoline (RFG) oxygen requirement, which is designed to reduce air pollution. Daschle is the original author of the RFG program in 1990, which has improved air quality in the nation's most polluted cities.