RFA Applauds House Restoration of Biofuel Loan Guarantee Funds
Next Steps Belong to Obama Administration
December 17, 2009 Washington – On Wednesday night, the House of Representatives voted to restore $2 billion to an alternative loan guarantee program that was borrowed to fund the “cash for clunkers” program. The Renewable Fuels Association (RFA) raised this issue earlier this year and is pleased to see the House vote to return those funds.
“This is an important step and one the Senate should replicate as soon as possible,” said RFA President Bob Dinneen. “Restoring these funds is just the first step. Making sure the shovel-ready advanced biofuel projects can gain access to these loan guarantees is vital for them to begin construction and production commercial volumes of next generation renewable fuels. ”
The onus to ensure that money is spent on programs that will go to meet the nation’s energy, economic and environment goals falls squarely on the Obama Administration. While President Obama is in Copenhagen prepared to tout a goal to reduce U.S. greenhouse gas emissions by 17%, his administration is lagging behind on initiatives that could already be helping the nation meet those goals today.
Specifically, the RFA noted in a letter to the Department of Energy in October that the loan guarantee program was being crafted in a manner making it extraordinarily and unnecessarily difficult for advanced biofuel companies to secure the guarantees. In its letter, the RFA wrote:
“A fundamental flaw of the loan guarantee program is that DOE is weighing the applications of emerging technology projects such as cellulosic ethanol using the same criteria as mature technology projects, and against more mature technologies, such as wind and solar, that have been commercialized in other countries. The challenges facing next generation advanced biofuels are simply much different than those of the renewable power sector.”
Earlier this week, Vice President Joe Biden provided President Obama with a memo outlining the energy progress and goals of the administration. In particular, the Vice President stated a goal of “19 pilot, demonstration, and commercial scale [advanced biofuel] refineries by 2012.” This is an admirable and eminently achievable goal, but will not happen without the continued partnership between the federal government and the private sector.
“Advanced biofuel technologies are too close to finish line to pull the plug and shift attention to other promising, yet unproven, technologies,” said Dinneen. “As a Senator and candidate, President Obama spoke clearly about the need to bring next generation biofuel technologies to the market. Now is the time to match that rhetoric with action. With a final push, cellulosic and other advanced technologies can begin commercial production of biofuels that will greatly help efforts to mitigate climate change, provide jobs, and continue reducing our reliance on imported oil.”
Dinneen continued, “Under the worst case scenarios of the U.S. Environmental Protection Agency, ethanol production today is meeting the GHG reduction goal the President will announce to much fanfare. Providing security to advanced biofuel companies in this tumultuous investment climate through loan guarantees ensures that America’s biofuels industry can continue to do its part and more in the battle against climate change. Allowing these technologies to wither on the vine is not an option.”