The U.S. House of Representatives has passed the Energy Policy Act. Important to agriculture are the Renewable Fuel Standards and renewable energy tax provisions.
The RFS outline a graduated increase in the use of ethanol and biodiesel– both are alternative fuels made from domestic renewable sources. By 2012, projections are for 5 billion gallons of renewable fuels to be used. The plan begins in 2005, with 3.1 billion gallons in alternative fuels.
According to projections, the bill's renewable fuel standards will create more than 200,000 new jobs, primarily in rural communities. Additional House estimates suggest that the alternative fuels will save 1.3 billion barrels of oil by 2016, improve the trade deficit by $28.5 billion over 15 years. It also could add $135 billion to the American economy by 2016 through increased agricultural demand and new capital spending.
"The Energy bill is good for American agriculture and for our rural communities," says Congressman Bob Goodlatte, chairman of the House agriculture committee.
The bill also includes renewable fuel-tax provisions that ensure the renewable fuels pay the full user-excise taxes levied to the Highway Trust Fund. When fully implemented, this provision will generate more than $2 billion annually in additional HTF revenue to improve the U.S. transportation network.
The legislation modifies the "small ethanol producer tax credit," thereby allowing cooperatives to pass the credit on to farmer owners, and provides a new tax incentive for biodiesel.
It extends the production tax credit for alternative fuels to those who produce electricity from wind, biomass (including livestock manure), and methane derived from farm wastes.
In an effort to protect rural electric coops from unnecessary costs and regulations, the bill provides protection for the rights of transmission owners and transmission dependent utilities, and allows for additional certainty for electric cooperatives in a changing utilities marketplace.
The House passed the energy bill by a vote of 246 to 180. It now heads to the Senate.
U.S. House Committee on Agriculture news release