One Curtain Falls, Another Prepares to Rise

By Bob Dinneen | November 15, 2010
Elections are as much about theater as they are about the real policy behind the candidates and parties for much of official Washington. This year's election surely didn't disappoint.

In an election of historic proportions, Republicans have retaken control of the House which means Speaker Pelosi will be replaced by Speaker Boehner and all the committee chairs our industry has worked with over the past four years will be replaced.

In the Senate, Republicans closed the gap but were unable to take full control. Effectively, this means any legislation that passes the Senate will have to be bipartisan in nature and incremental in scope.
What, if anything, does this all mean for U.S. ethanol?

The answer is everything and nothing. RFA personnel, and more importantly its members, will need to introduce themselves to these new lawmakers and their staffs. We will have to arm them with the facts as ethanol opponents will be seeking to do.

Regardless of the shift in power, we all knew that a more fiscally hawkish mood would dominate the incoming Congress. Efforts to rein in spending and balance the budget are the buzz phrases of the election and will dominate the rhetoric and agenda of the 112th Congress.

Ultimately, support for domestic renewable fuels is not a partisan issue. The RFA and the ethanol industry have successfully worked with both parties for nearly three decades to put sound, effective and forward-looking policy into place that facilitates the growth of domestic renewable fuel production.

In 1990, for instance, the RFA and the industry worked with a Democratic Congress and a Republican administration to get key amendments to the Clean Air Act passed, creating real market opportunities for ethanol. In 2005, the RFA and industry worked with an entirely Republican federal government to establish the first renewable fuel standard (RFS). In 2007, with Democrats in control of Congress and Republicans in control of the administration, we passed a five-fold expansion of the RFS containing specific market opportunities for next generation and advanced biofuels. And, on numerous occasions with differing political power structures, the RFA and the industry have successfully extended key tax policies related to ethanol production and use.

As a veteran observer of previous power shifts and the resulting policy opportunities they create, I remain optimistic that this new power structure may ultimately yield thoughtful and productive policy. In much the same manner President Clinton was able to triangulate after the 1994 elections, I believe President Obama has the temperament and desire to get things accomplished. Likewise, incoming Speaker Boehner and Democrats in the Senate clearly see how the American electorate reacts to gridlock and overly partisan bickering. They, too, see the value in getting policies passed with real world, measureable benefits.

In the end, which party is in power is less important than that the individuals in Congress understand the importance of domestic renewable fuels. The RFA remains committed to achieving the key objectives its members have outlined. These include an extension of current tax policy, including the Volumetric Ethanol Excise Tax Credit, support for cellulosic ethanol and other advanced biofuels through a refundable investment tax credit, responsible reform of tax policy, and the expansion of ethanol fueling infrastructure. The RFA also remains committed to ensuring that already enacted legislation, such as the renewable energy loan guarantee program, is implemented in a manner that will help, and not hinder, the commercialization efforts of advanced biofuel companies.

Make no mistake, there is still some good theater to be seen as races for leadership within each party, including leadership of committees, play out. But when the curtain rises in January, the RFA will be ready to hit the ground running and ensure that smart policies continue to underpin the steady growth of all domestic renewable fuels.

Author: Bob Dinneen
President and CEO of the
Renewable Fuels Association
(202) 289-3835