As a former member of the Austin, MN City Council and current five-term State Representative who chairs the House Agriculture Policy Committee, I’ve had a unique opportunity to observe first-hand how public policy impacts our communities in rural Minnesota.
Laws passed by elected officials shape economic development, the amount of taxes we pay, and even the kind of fuel we use to power our cars, trucks, and other machinery. For instance, public policy is largely responsible for driving new developments in the ethanol and biofuel industry in which Minnesota has long been known as a national leader.
The modern ethanol industry began in the 1970’s when the U.S. faced growing public concern over the use of lead as a gasoline octane booster in addition to rising gasoline prices caused by an OPEC oil embargo. Fuel rationing and shortages forced Americans to wait in long lines at gas stations while the nation experienced lost productivity, stock market declines, and economic recession.
To provide relief to consumers and protect air quality, Congress passed the Energy Tax Act of 1978, which provided an exemption to the 4 cents per gallon federal fuel excise tax on gasoline for fuel blended with at least 10 percent ethanol. Federal and state subsidies kept ethanol in production when fuel prices fell in the early 1980s, helping spark the “Minnesota Model” in which growers created a system of farmer-owned ethanol processing plants.
The Minnesota Model helped our state become a national ethanol leader by keeping profits in the community, providing local jobs, and adding value to agricultural products.
More recently, technology and research have moved us beyond first generation ethanol to include other biofuels and products.
The Next Generation Energy Board, also known as “NextGen,” was established in 2007 to provide public policy recommendations on bioenergy to the Minnesota Legislature. Specifically, NextGen provides research and recommendations on how our state can achieve greater energy independence, establish agricultural and natural resources sustainability, and promote economic prosperity in rural communities.
The NextGen Biofuels Advisory Task Force released a proposal earlier this year that helped shape a bill I introduced (HF 462) to strengthen our biofuels industry.
Right now, state law requires all gasoline sold in Minnesota to be “E10,” which is a blend of 10 percent ethanol derived from corn and 90 percent gasoline. HF 462 allows for other biofuels to enter the market by allowing fuel blenders to use ethanol or other biofuels to satisfy the 10 percent requirement.
Instead of relying solely on traditional ethanol, this proposal expands the law from requiring only ethanol to a law that requires biofuels generally.
The bill also makes changes to our state’s petroleum replacement goals. Current law requires all gasoline sold in Minnesota to use 20 percent ethanol by 2015 and 25 percent by 2025. HF462 decreases the 2015 ethanol threshold to 14 percent, adds additional intermediate goal levels, and increases the 2025 biofuels goal to 30 percent.
Legislators at the Capitol are also looking to the future by pushing to examine the opportunity for biobased content and formulated product production at integrated biorefineries or stand alone facilities that use agricultural and forestry feedstocks. Another bill I am authoring (HF 1584) updates language to allow the NextGen board to examine production opportunities for bio based content defined as a polymer, monomer, chemical, plastic or formulated product that is not sold primarily for the use as food, feed or fuel.
With smart public policy, we can make sure Minnesota remains a national leader in the biofuel industry. We need to support the growth of emerging biofuels while protecting the investments we have made in the ethanol industry. If carried out in a serious, thoughtful manner, we can encourage more companies to consider making investments in Minnesota, build on the strong ethanol foundation already in place, and create economic growth and jobs for farmers, agribusiness, and middle class families throughout Minnesota.
Jeanne Poppe represents District 27B in the Minnesota House of Representatives. She currently serves as Chair of the House Agriculture Policy Committee. Rep. Poppe can be reached by phone at (651) 296-4193, by email at rep.jeanne.poppe@house.mn, or by postal mail at 487 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., Saint Paul, MN 55155.