Obama Is Urged To Personally Bridge Congressional Deadlock Over Biodiesel Tax Credit

Stalemate between U.S. House and Senate has caused biodiesel industry to shut down; ethanol faces same challenge at end of 2010.

Published on: Apr 27, 2010

On the eve of President Barack Obama's visit to Iowa on April 27, the Iowa Renewable Fuels Association called upon the President to personally intervene in the stalemate between the U.S. House and Senate that is preventing reinstatement of the biodiesel blender tax credit. Since Congress inexplicably allowed the tax credit to expire at the end of 2009, the U.S. biodiesel industry has virtually shut down, costing hundreds of jobs in Iowa and thousands nationwide.

"While we welcome the President to Iowa to talk about jobs, we urge him to pick up the phone and talk with Congressional leaders about reinstating the biodiesel tax credit prior to their Memorial Day recess," says Denny Mauser, a western Iowa farmer who is past president of IRFA.

Mauser, who is also a board member of biodiesel producer Western Iowa Energy, says "There is no question that hundreds of Iowans would be called back to work within 24 hours of President Obama signing the biodiesel tax credit back into law.  Nationally, there would be thousands of green collar jobs reinstated virtually overnight. This calls for immediate Presidential leadership."

Already facing tough economics, nearly every biodiesel refinery in Iowa has shut down and laid off workers since the biodiesel blenders tax credit expired at the end of 2009.  With almost no opposition to the biodiesel tax credit itself, both the U.S. Senate and U.S. House of Representatives have passed bills to reinstate the tax credit.  However, they cannot agree on how to pay for the provision, so the tax credit has been nonexistent for over 115 days.

After visiting Iowa on his Main Street Tour, on Wednesday President Obama will tour Poet Biorefining in Macon, Mo. and then speak in Quincy, Ill. The National Biodiesel Board, which is headquartered in Jefferson City, Mo. less than 100 miles from Macon, has added their voice to the call for White House intervention to reinstate the biodiesel tax credit.

"We are pleased the President continues to demonstrate his support for the biofuels industry," said Joe Jobe, National Biodiesel Board CEO. "But we also need him to remind Congress that their inaction to reinstate the biodiesel tax incentive could cost the country tens of thousands of jobs. They must act now before America loses its only commercially available Advanced Biofuel."

The ethanol industry is also concerned about the situation. Many ethanol refineries have invested millions in equipment to remove some corn oil from their distillers grains co-product. The crude corn oil can be used as a feedstock for biodiesel production. Also, the ethanol blender tax credit is set to expire at the end of this year. Ethanol advocates are working to extend the tax credit to ensure there is not a similar hemorrhaging of green collar jobs from the ethanol industry.

"The ethanol industry is watching this closely," says Bill Couser, a central Iowa farmer. Couser, who serves as the current president of IRFA, is a board member of ethanol producer Lincolnway Energy at Nevada, Iowa.  "If America is serious about green collar jobs and energy security, there needs to be a long-term extension of both the ethanol and biodiesel tax credits," he adds. "If not, the job losses will intensify and ripple through other segments of our economy."

Earlier this month, representatives of fuel marketers and retailers joined agricultural organizations to demand immediate action from Congressional leaders saying that the longer the biodiesel tax incentive is allowed to lapse, the more difficult it will be to restore consumer confidence in the availability of this worthwhile fuel.

"All the industry needs is a little help from Washington to keep American made biodiesel competitive with foreign oil," Jobe said. "Biodiesel dramatically reduces carbon pollution, lessens our dependence on foreign oil and employs thousands in green jobs across the country. But without reinstatement of the tax incentive, the industry is barely surviving."