Motion to Instruct Conferees on H.R. 2419, Food and Energy Security Act of 2007

MOTION TO INSTRUCT CONFEREES ON H.R. 2419, FOOD AND ENERGY SECURITY ACT OF 2007 -- (House of Representatives - May 08, 2008)

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Mr. TERRY. Madam Speaker, I rise today with my motion to instruct to make sure that we keep a tax credit that the Senate has in its version of the farm bill for cellulosic energy and the blending. It's a dollar tax credit, and that's important that we have the higher number because cellulosic energy or cellulosic ethanol, I think, is where we are going to move to for our midterm energy strategy in this country, and that we really are at the very embryonic stages of its development, as I'm going to show here in a few minutes, and that because we are at the beginning stages of cellulosic energy, taking it literally from the research laboratories to the experimental market, trying to produce it more than at 1 gallon at a time, that we will need to, more heavily subsidize these beginning processes.

Now, I'm going to build our argument here of why I feel that cellulosic energy or cellulosic ethanol is important and why we need the $1 credit versus the lower number that was in the House version to get to our ultimate goal here, which is energy independence.

And by the way, I define ``energy independence'' as not relying on OPEC countries. We will need to use the natural gas and oil from Canada, and we will need to, for a variety of reasons, use the oil from Mexico; but wouldn't it be great if we were in a position that we didn't have to use the oil that's produced by countries that don't like us, that really hinders, as the gentleman from Tennessee, Zach Wamp, mentioned. Our foreign policy, we have to counsel, we have to do things for countries that really are trying to harm us economically, like Venezuela is right now.

Now, the bottom line here, the bottom line here is that every citizen of the United States is paying higher prices at the pump. They are paying more of their family budget to get to and from work, to and from the grocery store, and they're upset and rightfully so. So I am asked frequently, what is the plan. Well, the problem is there really isn't a cohesive plan. We do know that it is an issue of supply and demand.

Now, we've nibbled at the edges in an earlier bill this year that was signed by the President in December on the demand part. We did things to help incent electric cars, hybrids, battery technology; and probably the key component or foundation of that demand bill or lowering demand of oil was increasing the fuel efficiency of cars and light trucks. That was called the Hill-Terry bill. So I was one of the co-authors of that bill, and we got that in there. And that will increase fuel efficiency by 40 percent, in stages, to 2020, where I really see that we're going to end up earlier meeting those goals because of battery technology and ethanol.

We already have some vehicles out on the road today using ethanol blends as high as 85 percent that are hybrid. So you're combining ethanol, lowering the amount of oil that we have to use and refine, and battery technologies at lower speeds: for example, the Ford Escape.

Now, let me broach into an area here that I think is important for people to understand because our midterm strategy, at least as I envision it, is going to involve ethanol. And for some reason, ethanol has been blamed for every ill that has occurred globally. There has been severe droughts that have affected rice crops, and yet I read in U.S. papers that that's caused by ethanol. It's baffling how they make this connection, and it's wrong; but yet it seems like ethanol is causing more problems, as related by the media, than President Bush is. Maybe President Bush is happy that ethanol is pushing him off the front page. I don't know.

All I know is most of what you're reading about ethanol is completely bogus. And even people in the Corn Husker State are now starting to tell me, We can't rely on ethanol. We're learning that this is bad, because I am paying more at the grocery store. My eggs are more expensive because of ethanol. Huh? Well, okay. Maybe some of the grain-related foods have been impacted by ethanol.

I want to show you a few charts here. And by the way, these studies are done by the government. They've been reported in The Wall Street Journal and other major business magazines.

First of all, the problem with the higher prices at the grocery store in total is because of increased energy costs. The price per barrel of oil closed short of a $124 today. It's grown dramatically, and ethanol is actually helping with those energy costs. Every report that I have seen, and we will use this chart, has shown that we would be paying much more at the pump today if it were not for the ethanol that we're blending.

Here is a chart that shows today's average price at the pump of $3.65. That would be $4.20 at the pump today if we didn't have the ethanol to blend.

Now, you're saying, well, that's great but, you know, it's driving up the food costs so I'm actually paying more. Well, that's not true, but we're not hearing about it in our media.

The reality is that today, because of ethanol being blended into gasoline and that major difference of what you would pay at the pump, it would be as much as 40 cents more, maybe 60 cents more, according to that information. So actually the consumer is saving around $305 to as much as $420 a year because of ethanol.

Now, every study that I have seen has shown that the direct impact of ethanol, that part of the corn crop that's diverted from feed or shipped to be manufactured into food, impacts about 5 cents on a box of cereal. Every study that I have seen from Texas A&M, the government, University of Nebraska has said it is about 3 percent on grain-related foods. 3 percent. But yet you're saving 15 to 20 percent at the pump, and it is helping you in today's world.

Now, let's talk about cellulosic. Cellulosic is where you take a biofeed stock, it can be just about any living, growing thing, and you use an extra step in the process to take this and break down the gluten, kind of the glue that holds the cells together, that holds the sugars; and when we are able to dissolve those, then you can extract that and create ethanol.

Now this type of ethanol, by the way, has a higher Btu rating and has more energy involved in it. So actually this ethanol goes further for us.

What type of products can we use? Well, you can use things like switchgrass. You can use wood pulp. You can use sweet sorghum. You can use anything as long as it's a living, growing organism. You don't have to use food. So that's why it's important.

Now, I'm going to say that ethanol is here to stay, but I do believe ethanol, based on corn, is going to hit a ceiling; and so cellulosic, if we can then use these types of bioproducts and create more energy or liquid fuel, then that is more that we can displace. And we will need a complete national energy strategy, and that's why I was curious when Zach Wamp came up here and talked about Lamar Alexander announcing his energy plan using one of our biolabs that's doing work on the cellulosic area. And I think their focus in that lab has been on switchgrass and wood pulp. And so that will be interesting.

But the beauty of cellulosic is not only that it gets us much closer to energy independence but that every region of the country has something to offer, whether it is wood in the northeast or northwest, or algae; switchgrass, and even in my State you can go from switchgrass in the Missouri Valley area where I live to corn to sweet sorghum out in the dry parts because sweet sorghum grows stalks 12 feet tall and requires less than 12 inches of rain.

Where are we, and I'm getting back to my friend from Colorado to why we need the higher, the $1, the higher amount for the blending credit.

USDA and Department of Energy are partnering together--it's nice to see two of our agencies actually working together--to open up several cellulosic ethanol plants over the next 2 years. They will produce a small amount, maybe 10 million gallons to start with, but if we can't use this product in the market and blend it, because we all know this is first generation so it's going to be expensive. It's going to be about $5.50 a gallon to produce this with the first-generation technology. They will get it down to $3, but if we can't get past this first generation stage, we're never going to get to second, third, fourth generation. So we need that higher level of subsidy or blending credit to make sure that the product that comes out of the new cellulosic ethanol plants is being used within the market.

Now, my expectation is while maybe 2 to 3 years from now we're producing maybe 50 million, that's a drop in the barrel, by the way, 50 million gallons; I really think that with this type of a blending credit that we can then double and triple and quadruple and maybe tenfold that 5 to 10 years later. And then we couple that with hybrid and electric technology, and man, I really am optimistic about the future of our country.

Now, the gentleman from Colorado, I have one speaker that would like to say a few things. Do you want to take some time right now or let us finish up and you can have some time and I will take 1 minute for close?

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