The Senate Environmental Resources and Energy Committee this week held the first of two hearings on setting a biofuels policy for Pennsylvania, including Gov. Rendell's proposals to mandate bio- and ethanol additives to diesel fuel and gasoline.

Those presenting testimony included: Agriculture Secretary Dennis Wolff and DEP Secretary Kathleen McGinty, Matthew Ehrhart, Chesapeake Bay Foundation, Joel Rotz, PA Farm Bureau, Ben Wootton, PA Biodiesel Producers Groups and Nathan Willcox, PennEnvironment.

Secretaries McGinty and Wolff presented joint testimony on the need for the United States to become less dependent on foreign sources of oil, outlined the potential jobs benefits of the Governor's Energy Independence Initiative and cast doubt on the idea that the demand for corn-based ethanol is driving up the cost of milk, meat and eggs.

The joint testimony said, "biodiesel reduces many types of air pollutants, including carbon monoxide, volatile organic compounds, air toxics, sulfur dioxide and particular matter." They noted, however, that "ethanol blended with gasoline does lead to some increase in VOCs and nitrogen oxides" and said an analysis by the U.S. Environmental Protection Agency said the increases are not significant enough to cause difficulty in meeting air quality standards.

Gov. Rendell's biofuels proposal is included in House Bill 1202 (Gerber-D-Montgomery) and Senate Bill 789 (Dinniman-D-Chester).

Ben Wootten, PA Biodiesel Producers Group, said his group of six biodiesel producers have a combined capacity of 15 million gallons of biodiesel a year, but are not producing anywhere near that capacity. If fact, he told the Committee there are some producers that have halted production entirely because of the cost of grain is "fluxtuating wildly" and competition from producers in 24 other states who are receiving a variety of incentives to make their fuel cost-competitive.

Wootten asked that legislation be adopted giving biodiesel producers a $1 per gallon production incentive for three years that would effectively match the current federal incentives.

"Without it, Pennsylvania will continue to face a flood of out-of-state trucks entering the Commonwealth to distribute biodiesel produce made outside of Pennsylvania… meanwhile our in-state biodiesel industry will literally collapse within the coming months."

Matthew Ehrhart, Pennsylvania Director of the Chesapeake Bay Foundation, said, "The transition to alternative fuels will impact air quality, water quality, economic drivers and outcomes for numerous Pennsylvania business sectors, and the State’s competitive position in the future.

"The opportunity to grow crops with a significant profit margin would be a welcome reprieve from years of marginal income. However, as has often been noted, higher prices for corn due to an ethanol market will increase feed prices, impacting the livestock industry."

Ehrhart noted Pennsylvania farmers planted 100,000 more acres of corn this year than last in the expectation of ethanol-driven higher corn prices.

"Reports recently published by the Chesapeake Bay Commission (CBC)and the Mid- Atlantic Regional Water Quality Water Program document many of the potential problems associated with increased corn production for ethanol. The reports also document many of the solutions to those concerns, including new and well established best management practices and strategies," Ehrhart said. (See 9/17/07 PA Environment Digest.)

Ehrhart also said farmers may begin to feed their cattle distrillers grains, a byproduct of the corn-based ethanol production process, which is much higher in nitrogen content leading to higher nitrogen runoff from manure applications if nutrient management plans are not adjusted.

"The Chesapeake Bay Commission document Biofuels and the Bay: Getting It Right to Benefit Farms, Forests and the Chesapeake documents that a broad variety of crops can be grown for biomass to produce cellulosic ethanol, broadening the opportunities for participation and reducing the risk of excess nutrients. The ability to utilize wood chips in this process opens the opportunities for the forest products industry as well.

"Groups such as Penn State University and the Pennsylvania Environmental Council are already exploring how to efficiently grow biomass crops on abandoned minelands, restoring the abandoned mines and generating alternative energy opportunities. I think “win-win” may be one of the most overused and abused phrases in policy discussions today – but this is a true example of the ideal.

"I urge the committee to set bold goals and provide the incentives and leadership necessary to place Pennsylvania in the forefront of biofuels research and production while safeguarding natural resources of the Commonwealth."

Online Video: A video of Matthew Ehrhart's Testimony is available online.

Joe Rotz, PA Farm Bureau, said, "While it is no secret agriculture stands to gain from the advancement of renewable fuels, our members also support renewable fuel development as means to increase our national security by helping to reduce our dependence on foreign oil. Pennsylvania Farm Bureau supports adoption of House Bill 1202 to assist in leading the Commonwealth towards energy independence."

Addressing the issue of increased corn prices driving food costs, Rotz said, "It is unlikely that the production of meat and milk has been affected by higher corn prices to date. In fact, there is little evidence that any food category has been affected by higher corn prices in any significant manner."

On the environmental impact of increased corn production, Rotz noted, "While there is no disputing the fact that corn does require higher levels of nitrogen and other inputs than many other crops, the crop can still be grown with minimal environmental impact with proper implementation of nutrient management, conservation and erosion and sedimentation plans."

Rotz noted there are no ethanol plants in operation in Pennsylvania today and said the six existing biodiesel plants are struggling to be economically viable. He supported more incentives for existing producers to subsidize biofuel production.

Nathan Willcox, PennEnvironment, said his group supports production of biofuels to reduce dependence on fossil fuels, but noted what he said were several flaws in the legislation.

"PennEnvironment feels strongly that coal-to-liquids or “liquid coal” should not be part of any biofuels proposal, that there should be a global warming pollution standard for any biofuels program, and that there needs to be more of a focus on the long-term promotion of cellulosic ethanol than exists in the current legislation."

A video of the entire hearing and copies of testimony are available online at the Senate Environmental Resources and Energy Committee webpage.

The Committee will hold a second hearing on biofuels policy on September 25.

Sen. Mary Jo White (R-Venango) serves as chair of the Committee and Sen. Ray Musto (D-Luzerne) serves as Minority chairman.

NewsClips: Officials Say Biofuels Strengthen National Security

9/22/2007