Written Testimony by Congressman Ray LaHood (IL-18)

Senate Agriculture Subcommittee on Research, Nutrition, and General Legislation

Hearing: Issues Facing Ethanol and the Biofuels Industry

Tuesday, April 18, 2000

Mr. Chairman, thank you for holding this hearing to discuss Ethanol and the Biofuels Industry. This issue is very important to the people of the 18th District of Illinois, and I want to thank you and Senator Fitzgerald for giving me the opportunity to express my concerns.

With the recent reports over MTBE contamination of ground water wells, we have the opportunity to insure that ethanol will emerge as the primary oxygenate in the Reformulated Gasoline Program. I am encouraged by the Administration=s recent proposal to address the problems with MTBE, but I believe that we need to take the proposal a couple of steps further to insure the we protect our ground water from MTBE, while at the same time maintaining the clean air that we have achieved under the RFG program.

I believe the best approach would be to amend the Clean Air Act, in order to allow oil manufacturers to address the volatility of ethanol during warm weather and maximize the blending formulations of their gasoline. However, this approach would be very difficlut to achieve in the near term, which is why I am supportive of the efforts in Congress to ban MTBE outright.

As I have stated in the past, I believe that the Administration, and Vice President Gore particularly, has a proven record of supporting the biofuels industry, especially ethanol. That is why I hope the Administration will stay the course and not allow the state of California to opt out of the oxygenate requirement in the RFG program. Granting the waiver to California would not only severely impact the use of ethanol in the RFG program, it would also provide a precedent for other states to try to remove themselves from the oxygenate requirement. That precedent could ultimately lead to an unfortunate patchwork of Clean Air regulations throughout the country, instead of having one RFG national standard.

I believe that we can have a win-win situation. Banning MTBE and encouraging greater use of ethanol in the RFG program will benefit the environment, and it will also help our beleaguered farm economy. At a time when commodity prices are at an historic low, increased use of ethanol will provide a valuable market for corn. For every 100 million bushels of corn used in the production of ethanol, the price of corn increases by approximately 5 cents. This increase in price could mean the difference between solvency or bankruptcy for many corn producers in Illinois, and throughout the country.

Thank you again, Mr. Chairman, for holding this hearing.