Remarks Prepared for Energy Secretary Samuel Bodman
It's a pleasure to be in Indiana. Thank you all for coming.
I want to congratulate Indiana on the remarkable progress that has been made here in building a network of 28 stations that can dispense E85 in a little more than a year. Once again, the Midwest is showing the rest of the country how to get things done.
I'm also pleased the Energy Department has helped make this happen by providing more than $1 million in grant money to Indiana-some of which has been used by your Biofuels program to get these stations up and running.
Our grants to states to help them meet their energy priorities, including the promotion of alternative fuels, will total $36 million in the current fiscal year. And we hope to persuade Congress to increase them to $50 million in next year's budget.
Expanding the network of stations where drivers can fill up their tanks with the E85 blend, which is 85% ethanol and 15% gasoline, is critical to having ethanol play a bigger role in meeting our transportation fuel needs. So is expanding our ability to produce this clean-burning, renewable fuel.
The President has set a goal of reducing the nation's need for oil imports by 5 million barrels a day by the year 2025. To get there we will need to make more use of flex-fuel vehicles that run on E85 as well gas-electric hybrids and eventually hydrogen-fuel-cell powered vehicles. We'll also need to make more use of biodiesel fuels for diesel powered vehicles.
To make ethanol even more cost-competitive, we are working to diversify the feedstocks we use to make it.
To accomplish this, the President has also set a goal of developing ways to produce ethanol from cellulosic biomass like corn stover or other agricultural waste or switch grass. The President's budget request for next year seeks $150 million to fund research and development in this area, an increase of $59 million.
I am confident that once we are able to design the enzymes that can break down this material into alcohol; the scope of ethanol use will continue to accelerate at a rapid clip.
We also intend to spend up to $160 million over the next three years in cost-shared federal funds to construct up to three production facilities that will convert agricultural feedstocks into fuel, chemicals and heat and power. Our aim is to assist industry in demonstrating a commercial biorefinery that can operate profitably.
The progress we are now making in building the network of stations that can dispense E85 to the growing number of flex-fuel vehicles on the road is a product of many partnerships.
The commitments Meijer has made here in Indiana and in Michigan, and Kroger has made in Ohio and Texas, and that General Motors has made throughout the country to act as a catalyst in opening up new areas to E85, have been a huge help.
I am pleased that General Motors, Ford and DaimlerChrysler are supporting this effort by offering a growing range of flex-fuel models that run on E85 to consumers. I really appreciate DaimlerChrysler's recent commitment to having flex-fuel vehicles make up 25% of its total production run in 2008 which is a good first step forward, and I appreciate them working closely with our people to go much further. We look forward to the day when all passenger cars available in the U.S. market can run on either gasoline or E85.
Many Americans, I know, want to do something now to reduce the nation's use of foreign oil, and pulling up to an E85 pump is one of the best ways to make a difference.
And, I believe all Americans want to see a homegrown, renewable fuel play a bigger role in meeting our transportation fuel needs, particularly in light of the recent run-up in gasoline prices we have all endured.
In last year's Energy Policy Act, the Congress set a goal of nearly doubling the nation's annual production of ethanol to 7.5 billion gallons by 2012. That is going to take a lot more refining capacity. But I am very encouraged by the pace of construction and planning that I have been seeing. A total of 35 new ethanol plants are now under construction around the country, including six here in Indiana.
That is in addition to the 97 plants we already have operating. And there are expansions underway at nine of them.
All of these initiatives, I am pleased to say, will help boost our ethanol production capacity by at least another 2 billion gallons a year.
To keep this young industry growing, the Energy Policy Act extended the 51 cents a gallon tax credit for ethanol blenders, producers and retailers and also provided a 30 percent tax credit for station owners for the costs they incur to convert their pumps so they can dispense E85 or other alternative fuels.
Making the public aware of the E85 fueling option is a critical part of expanding the use of this fuel and I very much appreciate General Motors' efforts in this area.
To that end, we look forward to GM continuing its relationship with the Department of Energy. I know they are coming in this week to again demonstrate the necessary corporate leadership that will make a real difference for flex-fuel vehicle penetration, and I look forward to the results.
If we all continue to work together in this cause, I am confident that ethanol in general, and E85 in particular, will soon give us a new flexibility and independence in meeting our nation's energy needs.
Location: Indianapolis, IN
Media contact(s): Craig Stevens, (202) 586-4940