Creating Long-Term Energy Alternatives For The Nation Act Of 2007--Continued

Floor Speech

CREATING LONG-TERM ENERGY ALTERNATIVES FOR THE NATION ACT OF 2007--Continued -- (Senate - June 20, 2007)

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Mr. THUNE. Mr. President, I rise to express my opposition to this amendment. I worked closely with my colleague from Oklahoma on a number of issues when I was a member of the Environment and Public Works Committee. I worked with him last week on an amendment to expand refinery capacity because we have a shortage of refinery capacity. It is something that needs to be addressed. Unfortunately, that amendment failed. This amendment, however, is not necessary because we don't have a shortage of corn. In fact, demand for corn has increased because of ethanol production. It is expected to increase further thanks in part to the growth and expansion of renewable fuels. But to suggest for a minute that somehow we are going to run out of corn simply is not true. In fact, one of the most respected economists in the agricultural community, USDA's Dr. Keith Collins, has testified before the Senate Agriculture Committee about corn and ethanol production. I will highlight some of the points he made.

First, since 1948, corn yields have increased fourfold--from 40 bushels per acre to 160 bushels per acre--due to fertilizer, better management, technology, and improved crop genetics. Corn yields in the past couple of years have moved above the long-term trend and may continue to do so in coming years as well, helping to meet biofuel demand and reduce pressure on corn prices and acreage. Over the past few years, new-generation rootworm-resistant corn has been introduced and is showing strong yield increases in many areas.

As we look out over the next decade, USDA trend projections suggest that U.S. corn yields per acre are going to rise to 168 bushels per acre by the year 2016, and some seed companies suggest they are going to go even higher, as much as 20 bushels per acre above that level. Every 5-bushel increase in yield above the current trend level would be the equivalent of adding around 2.5 million acres to corn plantings, enough to produce 1 billion gallons of ethanol each year.

If you look State by State, Arkansas growers are expected to plant 560,000 acres of corn in 2007, up from 190,000 in 2006, a nearly 300 percent increase in corn acreage in 1 year. Louisiana farmers intend to plant 700,000 acres in 2007, up from 300,000 acres in 2006, a 233-percent increase in corn acreage. In Mississippi, corn producers are expected to plant 950,000 acres in 2007, up from 340,000 acres in 2006, a 280-percent increase in corn acreage.

My point is, in the underlying bill, basically, there is a stipulation that ethanol production can't exceed about 15 billion gallons. USDA's Dr. Keith Collins, who is an expert economist down there, says we can get to 15 billion gallons of ethanol based on corn production. Today, we are producing about 6.5 billion gallons of ethanol. So to get to 15 billion gallons, which is what the USDA's Chief Economist says we can reach, we have a long way to go. There is a lot of headroom to 15 billion gallons. To suggest for a minute that somehow we need this sort of an amendment that would put all these additional restrictions on the renewable fuels standard, I submit is unnecessary.

The underlying bill has provisions already that address this issue and waivers in place for economic hardships experienced by certain regions or States. Specifically, the President can waive the RFS if one of the following conditions is met: implementation of the requirement would severely harm the economy or environment of a State or region or the United States; if extreme and unusual circumstances exist that prevent distribution of an adequate supply of domestically produced renewable fuel to consumers.

I would also add that this particular amendment creates lots of problems for areas of the country because it forces investors to make investment decisions based upon the weather. We all know we can't protect the weather or predict the weather with certainty.

This amendment is misguided and unnecessary. I hope we will vote it down.

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