Robert Pore's Ag Blog

Tariffs on imported ethanol could fuel future alternative fuel research and development, said U.S. Sen. Ben Nelson, D-Neb.

Also, the nation’s growing ethanol industry had another record month of production in June, according to the Renewable Fuels Association.

Nelson introduced legislation this week that he said will boost ethanol’s future by taking the money generated by the ethanol import tariff and investing it into renewable fuels research and development.

“The United States must continue to push ahead with research and development of biofuels, and cellulosic ethanol represents the next generation of this important alternative, renewable fuel,” Nelson said.

According to the U.S. International Trade Commission, the U.S. imported 50.8 million barrels of ethanol in June.

During June, U.S. ethanol production increased to 318,000 barrels per day (b/d), an all-time record, according to the Renewable Fuels Association. That is an increase of 25,000 b/d from May and a rise of nearly 28 percent from June 2005.

The RFA reported that demand for ethanol also rose to record levels in June at 395,000 b/d. That represents a 46,000 b/d jump from May and an increase of more than 42 percent from the same period a year ago.

Nelson’s bill would create a fund in the general treasury, called the Biofuels Investment Trust Fund. That fund would take the imported ethanol tariff revenue through the Department of Energy and U.S. Department of Agriculture into research.

He said those dollars will increase and diversify biofuel production in the United States, such as advancing development of switchgrass so it can become a dedicated energy crop. Nelson said that research can be done at the University of Nebraska.

“This dedicated investment will help push our renewable-fuels efforts to the next level,” he said. “It only makes sense that we use these funds to improve our ability to produce ethanol right here at home and from numerous sources.”

According to the RFA, currently, 101 ethanol biorefineries nationwide have the capacity to produce more than 4.8 billion gallons annually.

There are 42 ethanol refineries and seven expansions under construction with a combined annual capacity of nearly 2.9 billion gallons.