Energy Bill Ramps Up Alternative Fuels Production

Article excerpt


President Bush's energy bill, the first in a decade, promotes the use and development of alternative fuels, including ethanol and bio diesel, and calls for 7.5 billion gallons to be produced by the year 2012. In addition, it requires the Department of Agriculture to consult with the Energy Department on blending renewable fuels and strengthen the Department of Agriculture's bio-energy program.

"The ethanol industry has doubled in the last four years and almost all of that has come from farmer owned production facilities," says Jon Doggett, VP of public policy for the National Corn Growers Association. "There are almost 90 ethanol plants in the U.S. and almost half are owned by farmers."

Despite the suggested increase in demand, agricultural markets have been cautious in pricing in added demand. "I think people have heard so much talk about ethanol [that] you are going to have to see actual production and usage pick-up," says Peak Trading analyst Charles Nedoss.

But not everyone is happy with the bill, which creates tax incentives and subsidies for oil and gas companies totaling almost $1. …