Lack of Biodiesel Tax Credit Increases Job Losses and Increases Pollution

The one Dollar per gallon tax credit that has helped the domestic biodiesel industry compete with foreign petroleum expired on December 31, 2009. According to recent government reports, the lack of a tax credit has virtually halted the production and use of biodiesel in the U.S. and caused the loss of 29,000 jobs. Industry officials and U.S. Secretary of Agriculture Tom Vilsack are urging Congress to reinstate the biodiesel tax credit, reports Congress Daily. “The recent lapse of the biodiesel tax credit cost that industry jobs, and these are jobs we simply cannot afford to lose,” said Vilsack. Oregon’s biggest biodiesel producer, Sequential Biofuels, has had to scale down to a bare bones crew, laying off more than half their production staff, and forcing owners to mop floors and pump fuel themselves to stay afloat. Many Oregon biodiesel companies have operated at a loss since 2009, desperately awaiting action from Congress. This decreased production and lack of tax credit has increased retail prices, which in turn reduces demand, which further weakens the industry’s ability to rebound if the tax credit is renewed. Vilsack adds, “Tax credits, by themselves, are not enough. Our effort must include identifying additional feedstocks available throughout the country while discovering more efficient production processes. Research and development must intensify.” (Release No. 0546.10 USDA Office of Communications 202-720-462 Prepared for Delivery at the National Press Club, Washington, D.C. October 21, 2010)

Despite the setbacks, recent government reports have also shown the immense benefit to the United States economy and environment caused by biofuels. The Renewable Fuels Standard, which requires 36 billion gallons of biofuels in the national fuel supply by 2022, means that new crops must be able to keep pace.
“By substituting domestic biofuels for imported petroleum, the United States would pay less for imports overall and receive higher prices for exports, providing a gain for the economy from favorable terms of trade. Improved technology and increased investment would enhance the ability of the U.S. economy to expand.” (Economic Research Report No. (ERR-102) 36 pp, October 2010, http://ers.usda.gov/publications/err102/)

The increased pollution and job losses caused by a simple lack of a tax credit are cause for citizen action. By writing to Congress, and by supporting your local biodiesel companies, you can help reduce our dependence on foreign oil, and clean up 78% of your main source of air pollution. By paying 10% more, you are investing in our domestic economy instead of sending your dollars overseas and supporting foreign dictatorships and environmental destruction around the world. While biodiesel is by no means a panacea, it is one way to help clean the air and water for our children, and provide jobs that are necessary in these times of high unemployment. If we want to remain a world leader, we must invest in green jobs, new energy sources, and local companies. We cannot wait for lame duck officials to lead, and we must heed the warnings of history that prove the power of the citizenry to change the world, 1 dollar and 1 vote at a time.

David Tourzan
Rising Phoenix Biofuels – Oregon’s First Biodiesel Company
4543 S. Pacific Hwy.
Phoenix Or. 97535
541-324-6695
www.oregonb99.com