Vilsack: Ethanol under fire by oil-producing states

Source: Matt Kelley, Nebraska Radio Netwrok • Posted: Friday, February 22, 2013

The ethanol industry is again being threatened and U.S. Ag Secretary Tom Vilsack is putting out a warning to leaders in states like Nebraska, the nation’s number-two ethanol producer. Vilsack says ethanol is clean-burning, renewable and helps reduce dependence on foreign oil.

“This is an important industry to agriculture. It’s an important industry to consumers of this country because you absolutely pay less at the pump because we have a healthy renewable fuels industry,” Vilsack told reporters after his private meetings at the statehouse. “The renewable fuels standard is the lynchpin to that healthy industry. It’s also the lynchpin to further investments in advanced biofuels that will allow us to expand significantly beyond corn-based ethanol, which will be a good thing.”

Vilsack says U-S senators is oil-producing states are pushing legislation that would get rid of the renewable fuels standard. Critics say it artificially props up an industry that can’t make a profit without federal intervention.

Nebraska has 24 plants operating with a capacity of more than 2-billion gallons a year and consuming 700-million bushels of corn. Ethanol is responsible for about 1,200 jobs in Nebraska. Iowa is the nation’s top ethanol producer, just ahead of Nebraska.

Vilsack also warns the looming federal budget cuts may have an impact on state programs that get federal grants or federal funding. Vilsack says he’s carefully drawing up the budget-cutting plans for the U.S.D.A.

“Unlike a shut down where you know eventually the budget’s going to come back up and you’re going to have adequate resources, this is really about reducing the budget, so you’re not assured that the monies that are going to be cut through sequester are ever going to be replaced,” Vilsack says. “It’s important that you calculate it right and that you implement it right, because you could be faced with anti-deficiency violations, for which there are civil and criminal penalties.”

If congress and the president cannot agree on an alternative plan, across-the-board cuts in the federal budget will take effect March 1st. According to Vilsack, a better approach would be to give federal agency leaders like himself the authority to make selected cuts rather than an across-the-board cut. Vilsack says “it’s frustrating” that congress hasn’t at least taken that step.

“What’s interesting is people are concerned about the consequences of sequester and the solution is for congress to do its job,” Vilsack says. “They have the power to stop this.” President Obama has asked congress to delay the across-the-board cuts and, instead, pass a smaller package of spending cuts and tax increases. Republicans in congress say they’re not interested in raising taxes.