Testimony

Of

Ronald R. Warfield, President

Illinois Farm Bureau

Before the Senate Agriculture Committee

April 18, 2000

Springfield, Illinois

Good morning Senator Fitzgerald and members of the Senate Agriculture Committee. I'm Ron Warfield, president of the Illinois Farm Bureau, the state's largest general farm organization.

We are here today to talk about the ethanol and biofuels industry and what we can do together to ensure that ethanol maintains its place in the nation's clean air regulations. We appreciate the opportunity to make comments in this regard.

We have seen ethanol grow from a little-known alternative fuel in the 1970s to a powerhouse today. The ethanol market has grown from just over 10 million gallons of production in 1979 to more than 1.8 billion gallons today.

As you know, the federal Clean Air Act requires gasoline in some areas of the U.S. to be blended with oxygen, like ethanol or MTBE, to help reduce air pollution. In fact, the U.S. Environmental Protection Agency credits these cleaner burning fuels with significant clean air improvements in many of America's cities.

Now, EPA is moving to eliminate MTBE because of health and environmental concerns. This action has, or will, prompt several states to ask the government to grant them a waiver from oxygen requirements of the clean air rules, saying they can meet clean air standards without MTBE. EPA has responded by seeking congressional action to eliminate the oxygen requirement and replace it with a national renewable fuels standard.

Farmers are scratching their heads at EPA's proposal to eliminate the Clean Air Act requirement that fuels contain oxygen to help reduce pollution.

We recognize the urgency of ending MTBE use to protect drinking water supplies. However, by eliminating the oxygen requirement - the cornerstone of clean air programs -- it seems as if EPA is trying to mitigate the problem of MTBE water contamination by eliminating the logical solution to clean air -- ethanol or other oxygenates.

Farmers have endured decades of controversy over ethanol's role in the Clean Air Act. Opponents have raised questions about ethanol's ability to reduce air pollution. Scientific studies show that clean air rules don't take into account ethanol's ability to cut carbon monoxide emissions which reduces pollution.

Scientific studies, including one by the National Academy of Sciences, have concluded that about 20 percent of the ozone, or smog, produced in highly-polluted areas is caused by carbon monoxide. Renewable ethanol has been shown to cut carbon monoxide emissions by up to 25 percent.

One of the markets at risk right now is the Chicago market. This area uses one third of the ethanol produced in Illinois. Chicago and Milwaukee combined utilize one third of the ethanol sold in the US.

EPA's Carol Browner last week told members of the Illinois congressional delegation that legislation granting a ethanol carbon monoxide credit - and thus allowing ethanol use in the Chicago market -- would be finalized by Memorial Day.

Farmers believe the administration could solve this problem right now by granting the carbon monoxide credit, clearing up any uncertainty about ethanol's role in the Chicago market.

All of these actions are particularly puzzling especially in light of the proven track record we have with ethanol. While MTBE has adverse human health and environmental impacts, there are none with ethanol.

Ethanol has a proven track record of reducing air pollution without any negative environmental or health effects.

Farm groups have spent a considerable amount of time with lawmakers to develop a legislative solution to many of these issues. Let me say here that we sincerely appreciate your efforts, Senator Fitzgerald, along with the efforts of other lawmakers here today to help us resolve the ethanol issue. We have worked closely with many in Congress to ensure ethanol will maintain its role in the Clean Air Act. We look forward to continuing that working relationship.

Farm Bureau, along with the National Farmers Union, the National Corn Growers Association, and the Renewable Fuels Association - the ethanol summit - are trying to agree on a common legislative strategy that offers a national solution to the ethanol issue that would prevent states from opting out of the federal oxygen requirements.

It's Farm Bureau's belief that any legislation addressing MTBE:

· Must be national in scope. All action should be on a national level. Allowing states to have different programs will not achieve our national energy goals.

· Must resist any state or regional waivers from the Reformulated Gasoline program's oxygen standard based on current law. Allowing states to opt out of this program will reverse the progress we have made in cutting air pollution.

· Must retain the oxygen standard. We cannot allow any reduction in air quality standards achieved under the Reformulated Fuels program.

· Must protect the real world environmental and public health benefits of Phase 2 of the Reformulated Gasoline program nationwide.

As a group, we support HR 4011, with an amendment that prohibits state or regional waivers of the RFG oxygen requirement based on current law, and protects the environment and public health. We will also support a companion bill in the Senate.

These legislative principles reflect a united strategy that expands ethanol use while preserving and enhancing the environmental and public health benefits of the Reformulated Gasoline Program - it is a win-win for agriculture, ethanol, and the environment.

Thank you.