(April 13, 2011)  Washington – Advanced ethanol will expand rapidly upon the market foundation being built by existing ethanol production if government policies allow advanced ethanol technologies to compete, said Brooke Coleman, Executive Director of the Advanced Ethanol Council (AEC) today in prepared testimony before the Senate Environment and Public Works Committee. Coleman warned against “backsliding” on current investments in domestic ethanol production and challenged the misperceptions of America’s ethanol industry.

“The advanced ethanol industry is in the first stages of building on the market established by conventional ethanol. What [advanced ethanol producers] need to meet expectations is the same type of tax treatment that the oil industry has enjoyed for decades, and an aggressive program to open the marketplace for the increased use of ethanol. It will benefit everyone to bring consumer choice to the pump. It will allow ethanol to excel when price competitive with gasoline, and vice‐versa. It will open the door to the development of more ethanol production, and other advanced biofuel production, from different feedstocks and new technologies. It will allow consumers to choose how much ethanol they use, freeing the industry from many of the concerns heard today.”

Coleman outlined recommendations to accelerate the commercialization of advanced ethanol technologies that focused on the important role federal ethanol policy will play in developing this arm of the domestic renewable fuels industry.

According to Coleman, “a stable and long‐term commitment to help bridge financing gaps” is needed from the federal government. Coleman also called on Congress to avoid “backsliding” when it comes to moving the domestic renewable fuel football forward. This includes preventing the Renewable Fuels Standard (RFS) to be re-legislated in Congress, improving and expanding upon existing loan guarantee programs, committing to advanced ethanol tax incentives concurrent with the timeframe of the RFS, and exploring new avenues to lower the risk for investors and reward high performing producers.

Additionally, Coleman called for “a stable and long‐term commitment to increase market access and competitiveness in the U.S. liquid fuel marketplace.” Such commitment would involve permanently eliminate the so-called ethanol “blend wall” by first and foremost incenting the production of flexible fuel vehicles (FFVs). Also needed are forward-looking policies that expand the installation of ethanol fueling infrastructure, such as blender pumps offering a wide range of ethanol blends like E40 or E85.

Coleman also dispelled oft-refuted claims by critics of American ethanol production and those seeking to drive a wedge between existing ethanol producers and advanced ethanol technologies on the cusp of commercialization.

“Much of the public and political discourse around renewable fuels has turned negative,” Coleman testified. “Often lost in the perpetual critique of biofuels are the tremendous economic and environmental benefits of domestic renewable fuel production. Arguments to the contrary notwithstanding, the renewable fuels industry has generally met every challenge put before it over the last decade or more.”

Specifically, Coleman noted the current economic benefits being accrued from existing ethanol production, including job creation and increased household incomes, as well as the fact ethanol has helped farmers get a fair market price for their commodities. Coleman pointed out that critics of ethanol that focus on corn prices ignore the fact that they saw significant benefits from farmers being “price takers,” taking a price well below the cost of production due to their overwhelming productivity.

Coleman also highlighted ethanol’s ability to slow the transfer of wealth from American taxpayers to petro-dictators in often hostile regions of the world.

“We understand from testimony here today, and from talking to members of Congress, that some consumers do not want biofuels in their gasoline. This may be the case. But before we consider rolling back the clock, and potentially undercutting the domestic renewable fuel industry, we should be careful to consider the ramifications: (1) renewable fuels have become an important and stable source of income and job creation in rural America; and, (2) every gallon of biofuel not used is another gallon of oil (and most likely, foreign oil) that will need to be purchased at debilitating prices by American consumers.”

Coleman noted that we cannot “free market” our way out of dependence on imported oil as the U.S. fuel market is both heavily regulated and heavily subsidized, including tens of billions in subsidies for the oil industry with which advanced ethanol producers must compete. He pointed to the Deepwater Horizon as a perfect example, explaining how Transocean and BP were able to avoid paying a large portion of taxes and other royalties that should have been owed to American taxpayers as the landowners.

“The advanced ethanol industry is not looking for handouts. It is looking for a level‐playing field and a durable, predictable and cost‐effective policy commitment to advanced biofuels over time,” Coleman concluded. “If this happens, we will bring tremendous value to the marketplace and to American consumers.”

Coleman's complete testimony can be read here.