department of energy predicts that biofuels could displace thirty percent of current fuel consumption by two thousand and thirty to get from today's three percent to tomorrow's thirty percent is going to require smart policies that focus innovation investment and infrastructure towards the next generation of biofuels realizing the potential of biofuels to significantly reduce our oil dependence and global warming pollution will require unlocking the energy in the parts of plants currently considered too tough to use developing technologies to produce the so called cellulosic ethanol and other advanced biofuels will open up an array of sources from which to produce alternatives t oil everything from agricultural and municipal waste to native prairie grasses could power our vehicles in the next few years and decades in the future the corner gas station might advertise that they can put  tulip in your tank rather than a tiger by expanding the fuel possibilities the next generation of biofuels will also expand the opportunity for all regions of the country to produce the fuels that meet their needs the best massachusetts once played a critical role in the u s energy supply back when melville was writing by whale oil lamps about captain ahab's pursuit of moby dick with the deployment of technology now being developed in the state massachusetts could once again begin to meet its own fuel needs and help other parts of the country do the same despite the promise of biofuels we can't let them become our white whale of energy policy we can't we must learn from them as we literally grow the fuel of the st century we have a chance to help develop a whole new industry that is good for people their pocketbooks and the planet as we reconcile the senate and house energy bills this fall we have the opportunity to steer the united states in a new energy direction the senate language would expand america's commitment to renewable fuels from four point seven billion gallons required today to thirty six billion and twenty two more than half from new cellulosic and other advanced biofuels this would save almost one point six million barrels of gasoline equivalent per day combining this with an increase in fuel economy and the rest of the best of the house and senate legislation congress could send an energy bill to the president that has the potential by two thousand and thirty to save more than twice the amount of oil we currently import from the persian gulf reduce u s global warming pollution by up to forty percent of what we must do to save the planet and create over one five million new jobs our witnesses today represent a broad spectrum of stakeholders in the  biofuels industry from innovators to producers to consumers i look forward to their testimony in hearing from them how congress can help guide the development of a fuel source that reduces our oil imports and the dangers of global warming must include a thorough examination of current and future technologies and today's hearing on biofuels should give my colleagues and me the opportunity to explore the future of transportation fuels i urge the chairman to schedule more hearings on technologies that can help address energy independence and global warming by creating fuel from crops and other biological materials biofuels hold great potential to help we in the united states from dependence upon foreign oil and to help reduce our greenhouse gas emissions while biofuels do offer some answers to both of these problems one question is whether biofuels offer the right answers they could very well but at this point the questions biofuels raise outnumber the answers for instance how much does the federal government need to subsidize corn based ethanol which seems to offer slight improvement in co emissions but also seems to put more pressure on food prices water supply and quality and land use or would it be better to make biofuels from soybeans sugarcane or switchgrass in august the wall street journal reported the cultivation of a plant called jatropha a shrub found in india that can grow in almost any climate and can potentially produce biodiesel fuel at a cost cheaper than any of the other plants that i have mentioned today is the jatropha plant an answer and what about the alternative such as hydrogen fuel cells this technology has the potential to propel cars and trucks without creating any carbon dioxide emissions but is it better than the biofuels currently under development i don't know the answers to these questions and i suspect the congress doesn't either this is another situation where i worry that instead of letting the markets decide which product or technology is best the government will try to pick winners and losers in july this committee held a hearing on the plug in gasoline electric hybrid car at that time i raised some questions but said the free market should be free to figure this out on its own just yesterday it appears that the market forces are starting to produce the answer while general motors  intend to keep developing hybrid technology executives from renault nissan and honda said they see gasoline electric hybrid technology as flawed and will apparently invest in all electric car technology instead fortunately these executives made their decision without having to ask us in congress what we think or us in congress telling them what to do an undercurrent of today's hearing is that the federal government should increase its mandated use of biofuels through a renewable fuel standard congress enacted such a standard in two thousand and five and witnesses today tell us that biofuel production has already exceeded the production requirements so will say that we need to raise the government's mandate even higher because the free market isn't responding i am not so sure that it isn't general motors is aggressively advertising its fleet of flexible fuel vehicles both chevron and british petroleum are proudly highlighting their research on biofuels the larger question is how we move from petroleum to alternative fuels without disrupting our economy one way or another the free market will give us an answer well i want to talk a little bit differently on another subject matter and i know we are going to hear from you on the importance of biofuels and researching renewable energy but i want to talk about what is happening right now in southern california and the communities surrounding my district unfortunately many people still don't believe that climate change is affecting states like california where right now we have twenty fires that are out of control the fires have burned well over four hundred and twenty thousand acres destroyed one thousand two hundred homes and have forced evacuations of one million people who right now we are seeing the most devastating effects of climate change in the history of the state of california residents as we know right now are being sheltered at stadium in san diego a military installation and at high schools the california guard and marines are being deployed to both help with the fires and provide security and assist in evacuations resources are also being volunteered by our friends south of the border from mexico and these fires are devastating families our communities our economy and our state and in june two thousand and six i just want to reiterate this science journal researchers concluded that more than land use changes or forest management practices the changing climate was the most important factor driving the increase in the average number of large wildfires in the western united states human activity has caused climate change and only through human action can we mitigate adapt these changes now more than ever i believe that we must have the courage to take swift action to implement an energy policy that relies less on greenhouse gas emitting fuels and a mandatory emissions reduction policy that quickly brings down emission levels and i hope all my colleagues here on the dais and from all regions of the united states will join me in supporting our communities in southern california as we struggle to stop the spread of these wildfires and cope with the devastation that they are leaving in their wake and i hope my colleagues will join me in supporting efforts to combat global warming before its dangerous impacts become irreversible and more communities will suffer i yield back the balance of my time the chairman the gentlelady's time has expired and we thank you for reminding us all of that here today the gentleman from arizona chairman and in the interest of getting to our witnesses testimony i will abbreviate my statement and ask unanimous consent to put my whole statement into the record i want to begin by thanking you for holding this hearing on the importance of biofuels to both our environment and our economy i strongly believe we need to reduce our dependence on oil and diversify our sources of fuel especially our transportation fuels i would note however a cautionary concern this congress in the past mandated mtbe without fully knowing the consequences of that additive and as we all know it has caused concern to our environment in terms of the migrating of that fuel out of tanks and damage to the environment it seems to me we should use that experience as a guide here learn as much as we can about alternative fuels learn as much as we can about ethanol encourage its use but encourage the use of those kinds of fuels in a way that will spur innovation i think the congress is not particularly well suited to predict the scientific future and to look into the future and to know what in fact are the best fuels and what in fact are the safest fuels and will cause the least environmental damage but that is what this process is about and i applaud the chairman for holding the hearing i do want to add as a point that earlier this year in the markup of the energy bill along with my colleague mister melancon i offered an amendment to require the e it was intended to enable us to be fully informed before we proceed with the use of those higher concentrations of ethanol the australia version of the epa has found in its studies that mid level ethanol blends can cause problems in terms of in current engines obviously hopefully we can modify those resulting in failure of exhaust components engine damage engine stalling failure of engine cut off switches and fuel leakages and blockage of get input we get science we hear from experts like we have before us here today the amendment was supported by among others the american lung association clean air watch and the natural resources defense council so i look forward to our witnesses testimony today i look forward to encouraging commitment to biofuels production and use in this country must be one of the linchpins of our national energy policy in the decades to come and helps provide a significant part of the solution to global climate change with that in mind i am especially and appreciative we have invited one of the most innovative biofuels entrepreneurs in the country here to testify before us today don endres of brookings south dakota is the founder of verasun energy which has in the few short years since its creation grown to be one of the largest ethanol producers in the country don is one of my touchstone contacts on all matters pertaining to energy and biofuels and i consider him one of the foremost experts in the country on biofuels issues i think you will find his testimony and experience to go directly to some of the comments already made by other members of the panel as it relates to the importance of technological advancement not only for corn ethanol but cellulosic ethanol and the work that he and others in the industry are doing to reach the goals that we have been advocating i am very pleased he was able to attend the hearing today commend his testimony to all of my colleagues i think he will offer a description of the current market conditions which support the need for fostering the market further with a more aggressive renewable fuels standard i also am pleased t a biofuel vehicle demonstration following the hearing i drive a chevy impala that runs on e and a jeep liberty that runs on biodiesel so i am pleased that other members of congress will get a chance to learn more about those vehicles today and the importance thank you mister chairman i also thank you for holding the hearing today and i thank the witnesses for being with us today i will submit my full statement for the record and we are all anxious to move on to what they have to say but just very briefly we are all concerned about energy security we are glad that there are entrepreneurs who are looking at the issue and looking at the use of biofuels we all understand the nature of  from which they are derived we also know that there are some inventive processes like mister gardener's that are taking place with some mixed usage we are looking forward to hearing a little bit more about that we do have some concerns water land availability the cost the impact that it has on food figuring out what works and what doesn't work looking at waste products seeing what is going to be economically and commercially viable are all issues that we will want to talk with you about looking at the distribution and infrastructure systems of those hearing a little bit more from you about that commercialization and distribution process is going to be of interest to maximize the use of sustainable sources of domestic energy and so i am looking forward to hearing from our panelists and finding out from them what the inslee thank you i think it is a very important hearing i appreciate the chair having it i have been travelling a lot the last couple of months talking about clean energy issues and what strikes me is the people's  biofuels which is also matched by their anxiety about what happens if we don't move forward in biofuels and i think it is very important to share with the public the potential of the next chairman with oil headed toward the astronomical height of ninety dollars per barrel the skyrocket gas prices in the home heating season rapidly coming upon us it is clear that there could be no better time to have a serious discussion of biofuels  in my own home i am burning the highest possible blend of biodiesel in my heating oil in my district there are several commercial and private producers of biofuels and nationally an aggressive investment in biofuels technologies could have tremendous results for our economy our independence our fight against global warming and our sovereignty i just heard in a briefing this morning by lee hamilton half of the leadership of the baker hamilton study of course about how our options in terms of promoting democracy in s we need to make it easier for these fuels to come to market i had a constituent call one of our offices in new york all excited because he had just bought a flex fuel vehicle and she wanted us to tell her where the nearest pump was and we were sorry to tell her there were only two e pumps in new york state out of the one thousand three hundred or so in the country so even if you have a flex fuel car the odds are you are not going to be able to get the benefit from it thirdly we need to make it easier for the average consumer to use these products which means making furnaces that can burn biofuels and more cars that can run on them more available and more affordable working towards these goals we also need to be careful that we are sure that we are getting the most out of our investment by making sure that we maximize our greenhouse gas for opening statements from members of the select committee has expired the chairman we will now turn to our witnesses and our first witness is adam gardner even though adam now calls portland maine home he and his bandmates from of the nation's leading touring bands playing sold out shows from radio city music hall to farm aid to the boston symphony hall where they performed with the famous boston pops four years ago adam and his wife lauren decided to start reverb a nonprofit that educates fans and other musicians about environmental sustainability they have greened forty two touring bands and among many initiatives encouraged touring musicians to switch to biodiesel bus you for inviting me to testify today it is truly an honor to be part of this dialogue on global warming as a musician who spends most of his time either on the road in a tour bus or on stage in a t shirt i also want to thank you for the opportunity to wear this suit today to something other than a wedding or a funeral my band guster started touring fourteen years ago from our home base in boston we started in a small van and eventually graduated to a tour bus and an eighteen wheel truck for our equipment we knew our tours consumed a lot of fuel and you can only nickname your tour bus the earth eater for so long before making a change we wanted our actions to match beliefs and i thought there were a lot of other bands out there that felt the same way but just didn't know where to begin in response my wife lauren sullivan who has been working in the environmental community as long as i have been playing in a rock band decided to create reverb a nonprofit organization dedicated to educating and engaging musicians and their fans to promote environmental sustainability over the past few years we have worked with over forty five major national tours to implement a laundry list of greening efforts that reduce waste and carbon emissions backstage while simultaneously educating and activating concertgoers through a festival like eco village out front reverb also launched the campus consciousness tour now in its third year to bring our unique environmental program to college campuses across the country while adding daytime activities such as open town hall forums with students band members environmental groups on campus faculty and administrators to discuss sustainability on campus and what students can do to make a difference to date reverb's efforts have reduced co emissions by more than twenty five zero tons facilitated the use of over two hundred and fifty to so many different stakeholders and has a wide array of possible uses and benefits biodiesel allows us to power vehicles while also protecting the environment facilitate our independence from dangerous foreign oil dictatorships and can support jobs in local and rural communities the use of biodiesel is radically changing the music touring industry and there is no reason why we couldn't continue to broaden its reach ideally some day soon our fans will drive to concerts in biodiesel cars of their own maybe even plug in hybrids that would be cool for guster making strides towards kicking our own oil addiction hasn't been easy we had to leave our first bus company to find one that would allow us to put b in the tanks at the time there were only one or two such companies in existence finding biodiesel pumps on tour has been hard with just one thousand one hundred around the country reverb has to coordinate local suppliers to deliver fuel to bands on the road but while our nation has made great strides in biodiesel production there are a number of ways we could continue to improve the energy bills that the house and senate passed this summer are a great start increasing production from renewable energy sources like sugar wood and algae while beefing up infrastructure allowing consumers better access to biofuels at the pump is a key component i encourage you to keep this energy bill green allowing congress to take its first real step in the fight against global corporations can do more as well i would like to see auto companies encourage the use of biodiesel in higher blends all the way up to pure b rather than holding the line at a five percent blend i would also hope that the agricultural community could come together guster was thrilled to play with willie nelson at farm aid where we heard firsthand from small family farmers who want to be part of the solution there i had the pleasure of meeting the founders of the sustainable biodiesel alliance the sba is a nonprofit group mission is to promote sustainable biodiesel practices from harvesting to production to distribution keeping both environmental and social considerations to heart it would be awfully ironic to go from reliance on irresponsible oil companies to biofuels industry dominated by large scale commercial farming at the expense of small farmers community economics and the environment if done right biodiesel offers the unique opportunity for a field product that is not just less bad than petroleum diesel but is an actively good fuel that can reinvigorate our local economies and actually replenish and revive the environmental damage that we have caused on my path i have encountered so many inspiring motivated and truly selfless individuals who are determined to create and propagate positive change from pioneer artists like neil young and bonnie raitt who have been circling the country using biodiesel for several years now to the city of milwaukee's venu gupta who powers his fleet municipal fleet with millions of gallons of biodiesel made right in mister sensenbrenner's home state of wisconsin most inspiring are the countless conversations held with the millions of music fans at the reverb eco village i invite you all to the next reverb show so you can take part in this dialogue where of global warming doesn't center around doom and gloom but rather optimism commitment and creative solutions it is a generation that stands ready to stare down the greatest challenge they will have to face but they also look to you on your stage to lead the way i see this moment in time a relative flicker when considering the earth's age as a critical one the growing wave of momentum to defeat global warming during this small window of opportunity could very minnesota iowa michigan and mister endres's home state of south dakota recently verasun and enterprise rent a car announced that the two companies will work together to use verasun e brand in enterprise's flex today on behalf of verasun i grew up on a farm in south dakota and i am pleased to be representing one of the nation's largest biofuels companies we have four operating facilities in production today we have four more under construction and one more facility under development once we are complete with these new facilities verasun will have an operating capacity of approximately one billion gallons per year we believe ethanol from cellulosic feed stocks will complement corn based significantly in recent years due to the demand from the market in part because of the policies put in place by the federal government today approximately fifty percent of the nation's gasoline is blended with ethanol because of the step this nation has taken to diversify our liquid transportation fuel since the advent of the automobile a century ago but we are just beginning today the industry is still too small our seven billion gallons of current  five percent of the one hundred and forty billion gallon gasoline market now is the time to springboard from the solid foundation of the ethanol industry to diversify both the feed stock used to produce renewable fuels and how they are used  our transportation fleet if we are going to make game changing steps towards energy independence addressing global warming and creating new economic opportunities three very important items have to come together first enterprise must be empowered to work second the federal government must lay the framework to enable the industry to succeed and third consumers must have both the access and the incentive to join our commission oil is no regularly breaking new record highs this has caused a lot of players to jump into the race to find alternatives in the past their enthusiasm in investment rose and fell with the cost of a barrel of oil while this could happen again i believe that world events have created a fundamental change walter wristen the former chairman of citibank once famously said that capital goes where capital is well treated and the worst way to treat capital is to throw it into uncertain situations it is critical now more than ever that we have federal support to help achieve ethanol's potential our first objective should be to look at every opportunity in congress to achieve the certainty that vital investment capital is looking for product demand i experienced firsthand the importance of government policy when we took verasun public in two thousand and six it became very clear very quickly that people participating in the financial markets understood the importance of renewable fuels and they were excited about investing in something that could do so much good for our national security our economy and our environment their big questions were about policy what role would the government play in promoting renewable fuels fuels standard work as promised the same questions about government policy that faced verasun in two thousand and six are facing those seeking investment in cellulosic technologies from the financial markets today to pass an energy bill that begins to address these questions if we want to see continued growth of the ethanol industry the ethanol industry is outpacing the current rfs schedule under the current law if rfs mandates the use of four point seven billion at the present time that being said with ethanol selling at one dollar fifty five cents per gallon and conventional gasoline selling at over two dollars a gallon ethanol clearly is lowering fuel cost at the pump by blending ethanol and gasoline today some refiners are passing considerable savings to consumers unfortunately not all refiners are capitalizing on the economic advantages of blending ethanol one of the most effective things congress and the president can do in the short term  beyond addressing these near term issues the federal government should send a clear long term message to the industry to support continuing investment in growth we support the senate's call to expand the rfs to thirty six billion gallons by two thousand and twenty two including a significant call for ethanol production from cellulosic material we believe this is a very achievable goal but one that will require widespread adoption of e usage without e demand the market will not support the early stage development that is witness steven gatto is the chairman and ceo of bioenergy international a company that has two one hundred and eight million gallons per year of corn ethanol plants in pennsylvania and louisiana they are also planning to build a smaller very important issue i applaud your leadership in recognizing the urgent need to change our energy paradigm to the chairman in particular your leadership has inspired me over the last fifteen years when i would come to  washington back in the late s to discuss ethanol i was occasionally referred to as the village idiot gasoline was selling for about one dollar thirty cents a gallon and no one had ever heard of the word cellulose mister chairman you were one of the few who listened and inspired me to make a difference and for that i profoundly thank you since then i have had the privilege of serving on the biomass technical advisory board under president clinton and president bush  have also worked with some congressional committees helping to create the energy policy act particularly the cellulose component as the chairman knows i came to this industry somewhat circuitously in the late s i have a cousin who is an avid environmentalist who took me to new hampshire to talk about composting of municipal solid waste and about the same time frame i was introduced to a technology that had just gotten patent number five million it was a little bug that loved to eat all the sugars from bio ass i figured it had to be a hell of a lot more profitable for us to make booze instead of making dirt as a result i launched what was one of the first cellulosic ethanol companies in the country bc international which later administration the deal fell apart the industry set back a decade set back not because of a failure in technology but because of lack of incentives and moreover a lack of vision of what was to come today with oil pushing ninety dollars a barrel the tragic loss of so many lives in the middle east and hydrocarbons fueling the climate crisis we cannot afford another decade of delay my message is simple yet urgent  a tipping point we are at the brink of the next industrial revolution on the verge of transforming our economy from a carbon based society to a carbohydrate based program with next generation biorefineries i would suggest this is the year we either commit ourselves to an all out of fensive to reduce our dependency on oil to stop funding radical countries that continue to do us harm and to reduce our insatiable use of fossil fuels to stem our climate crisis i don't want to tell my grandchildren we failed because of lack he wanted to put a man on the moon however we did not attempt to do this all at once we had a program sparked by vision propelled by leadership but grounded and faced yet ambitious milestones we shot a rocket in the air circled the  flew around the moon and finally landed on the moon it changed history forever we need that kind of vision and commitment from you all today let there be no doubt the energy bill this year is the fight of our generation clearly with all the discussion of a glut the biofuels industry has met the call to action and surpassed the current rfs for all the right reasons energy independence global climate change jobs and american prosperity the question and opportunity is what do we need to do to provide america with a self sustaining program that has an evolution with a beginning a middle and an end home grown fuels initially from corn then biomass which is available from every region of this country the earth's ability to produce sugar from is virtually unlimited the story sounds too good to be true but it is real and has already committed to an economic boom in this country as other sectors such as housing lag today i serve as chairman and ceo of bioenergy international science and technology leader in the development of multiproduct biorefineries that produce a wide range of biofuels and bio based specialty chemicals we just launched the first of its kind research facility in woburn massachusetts after spending the better part of the last two years integration of our cellulose technology retro fitting existing and building future plants that drive down costs and move away from food based raw materials these three collective steps we believe are essential to ensure long term financial success and continue to drive investment and interest in this sector i believe we are very close to a day when a pound of sugar can replace a barrel of crude in the manufacture of everything from the fuel we put in our cars to the plastics and fabrics we use in our everyday lives i warming and provide american jobs in communities throughout the country the bottom line is corn has and cellulose technology will change the game forever and it will spur two dollars to three dollars trillion in new investment today we not only have the responsibility to transition away from fossil fuels with ethanol we have the ability to do so the immediate challenge for all of us here today is not to get bogged down in the incidental issues of first generation corn plants but to focus the real challenge to this committee and all of us to wean ourselves off the perils of oil as quickly as we can thank you the chairman thank you mister gatto very much and our next witness is doctor suzanne leschine who is a professor of microbiology at and members of the committee i thank you for giving me this opportunity to speak today on the subject of biofuels and the impacts of biofuel development on energy independence and global warming i am a professor of microbiology at the university of massachusetts amherst and a founder and chief scientist at sunethanol a new biofuels technology company headquartered in amherst i also serve as codirector of the institute of massachusetts's biofuels research at u mass amherst which was established by an interdisciplinary team of scientists and engineers to develop cost effective technologies for producing biofuels and other value added materials from biomass our goal is to establish the scientific and technological basis to enable the u to meet the department of energy goals thirty percent gasoline reduction by two thousand and thirty the link between fossil fuel combustion and global warming is compelling we urgently must begin to limit greenhouse gas emissions the need to limit greenhouse gas emissions has become even more critical with recent results reported this week in the proceedings of the national academy of sciences first that carbon dioxide emissions are growing at a much faster rate than anticipated and secondly the ability of the land and the oceans to absorb carbon dioxide from the atmosphere has actually diminished clearly as we look to the future in meeting our transportation fuel needs we must limit the use of fossil fuels the only form of energy that can contribute substantially to fulfilling transportation fuel requirements at costs competitive with fossil fuels is solar energy captured by photosynthesis in plants and stored in the form of biomass at present plant biomass is the only significant source of liquid transportation fuels that may replace the world's finite supply of oil ethanol derived from biomass is one of the most promising biofuels in addition to reducing our dependence on imported oil thereby improving domestic energy security and lowering the u s trade deficit biomass ethanol production will also yield environmental benefits in the form of reduced greenhouse gas emissions in addition the increase value of agricultural crops crop residues new energy specific crops will benefit rural economies through higher incomes and increased employment opportunities economic modelling studies suggest that simply integrating cellulosic biomass crops into the agricultural rotation of existing cultivated acreage could increase the net income of u s farmers by thirty two percent or twenty three dollars billion in massachusetts where forest growth exceeds wood harvest  biomass from wood is a sustainable resource the total woody biomass supply in massachusetts has been estimated to be four point four million tons per year which could theoretically yield more than four hundred million gallons of fuel the relative benefits of biomass ethanol compared with fossil fuels have been passionately debated important questions have arisen concerning the energy return on investment the ratio of ethanol energy output compared to nonrenewable  energy input required to produce ethanol fuel it is very important to note that several peer reviewed studies have concluded that the energy return on investment for fuel ethanol production is favorable corn ethanol energy yields are favorable gasoline in large part this energy advantage arises from the fact that biomass ethanol production makes use of the whole plant the useable fermentable components of a plant cellulose which we now know what that also the industry has demonstrated that the agricultural sector of our country can play a key role on our path to energy independence cellulosic ethanol is a reality demonstration plants are in operation and full scale commercial plants are in construction at the same time new technologies are being developed and must be developed for more efficient and more cost effective conversion of biomass to ethanol biofuel specifically to overcome the resilience of cellulosic biomass plants are tough things plant biomass is composed of highly ordered sugar polymers such as cellulose these plants components are shielded by a matrix of other from massachusetts and we hope that by using this technology we will be able to bring down the costs of cellulosic ethanol production and make this a reality in conclusion cost effective production is achievable in the near term this will be a monumental task it is essential that there be significant resources invested for research and development at both the applied and basic science levels such investments will have enormous positive impacts on the environment and the economy especially benefiting rural economies given that biomass is a regional resource the impacts will be broad and widespread across the country perhaps most importantly it is essential that we begin to limit greenhouse gas emissions biofuel production must be a key component of our energy future thank you the chairman thank you doctor very much and our final witness nathanael greene is a senior energy policy specialist working on issues as was noted earlier in the fight against global warming there is no silver bullet at best there is a silver buckshot i believe that biofuels can be an important contributor to the fight against global warming one of those pieces of buckshot but as opening statements of all the members of the committee noted there is also the potential for biofuels to backfire to make global warming worse and to threaten our lands forests water wildlife and the public health new crops and technologies that are being developed today and moved from the lab to the marketplace such as the technologies we have heard about from some of the other witnesses will make it easier to produce a lot of biofuels with a smaller environmental footprint but just because we can use those technologies in a more sustainable way doesn't mean that we will i think it is a critical mistake to assume that technologies or feed stocks are a quick fix to the challenges of biofuels i think these new technologies are very promising but just as it is a mistake to assume that they will fix our problems it is a mistake to assume that the existing corn ethanol technologies are somehow inherently flawed just because they only provide marginal benefits we can make corn technologies much better and we can use advanced technologies in very unfortunate and flawed ways to address this issue we really need strong environmental safeguards and performance standards it is time to shift our bioenergy policies and our global warming policies really away from a more is better strategy to a better is better strategy this means moving away from a simple volume related standard and the flat per gallon tax credit to policies that reward performance congress should adopt a low carbon fuel standard as california is planning to do the low carbon fuel standard rewards progressive reductions requires progressive reductions in the average greenhouse gas emissions from our transportation fuels this approach rewards gallons of renewable fuels electricity hydrogen any transportation fuel that can help reduce  average greenhouse gas emissions of transportation fuels in the context of the current comprehensive energy bill that is being debated and reconciled between the house and the senate we should include an expanded renewable fuels standard but we should make sure that it includes the environmental safeguards and performance standards that will move it towards this better is better approach the industry is at a critical juncture at this point as we have heard earlier  investors university labs entrepreneurs are all working to see if the united states is committed to reducing our addiction to oil and starting to reduce our global warming emissions we are at risk of losing a lot of the momentum that the industry has gained in the last few years but we are also at risk of pushing the industry forward in the wrong direction and that is why we need the environmental safeguards and performance standards to be built into the renewable fuels standard my testimony goes into a fair amount of detail about the types of safeguards and standards that we would recommend but at a high level i would say we need to make sure that we are making a downpayment on global warming reductions this means setting a global warming emissions performance standard as a central part of the renewable fuels standard we need to make sure that we are not going into critical sensitive habitats and lands held in public trust we need to make sure that we are growing our new crops with the same best practices that we require of our existing commodity crops we need to make sure that we are protecting public health by setting rigorous air quality standards that require these new fuels that combust in different ways than our traditional petroleum based fuels to be at least as clean at the tailpipe as our old fuels are we need a labelling program to actually understand how these fuels are made what their performance characteristics are and then to link o incentives to those labels it is very clear from your opening remarks that you are all aware of how complicated biofuels are they are probably in my opinion the most complicated and important solution to global warming out there but because of the urgency of global warming we need to struggle through these challenges and so i urge you to continue with these sorts of hearings and really grapple with this problem because your leadership essential thank you the chairman thank you mister greene very much that completes the time for opening statements from the witnesses and the chair will now recognize himself for a round of questions mister gardner you are out there on an ongoing basis talking with the young people across the country can you give us a sense of what this green generation is calling for congress to do or its government to do  just been exciting to talk to all these folks when we came up with the idea for reverb i am first and foremost a musician and we thought we would take advantage of the relationship that bands have with their fans to spread environmental awareness and it turned out to be a really positive side effect that it actually strengthened that relationship to be talking about these issues to our fans and their response has been enormous it has been enthusiastic i have learned about many young people out there working hard already whether they are on campuses working on biodiesel plants right there on campus converting waste probably vegetable oil from their dining halls to biodiesel in their science labs and running their buildings and grounds vehicles on the stuff to coordinating and rallying a large number of youth groups across the country i was just recently in michigan with a rally it was actually a campus climate challenge rally around environmental issues on campus and just it was amazing to see the excitement and energy that young people have around these issues they definitely want leadership they are leading themselves but they are certainly development of the technology and commercialization what recommendations do you have for us in terms of congressional policies that we can put on the books that would help entrepreneurs to make it through that valley of death  think that is a question that has been most often asked and i think there are three very important elements one is market based incentives that have the ability to pull the use of the products that we intend to make so in this particular case talking about an expanded rfs specifically to cellulose versus corn components is an important element here is very important to have an open playing field so that the products we seek to make and put into the marketplace can be utilized and then i think the third thing is to educate what is a key imperative here and we talk an awful lot about ethanol but the reality is what these plants are all about are creating new biorefineries why because what they all have in common is they all make cheap sugar and the very same science that is today being used to convert the sugars that come from  the organisms that are needed to replace yeast so if any of you have ever made beer or wine at home you take your yeast you add it with your hops that is how you are making your ethanol here we create new organisms and they accomplish the same thing interestingly however we can take those very same fundamentals and apply them to all sorts of things like plastics fabrics dupont for example coming out with thirteen propanediol from an organism now made a now producing textile fibers and products that can be used in everyday life the chairman let me just ask a quick question of everyone on the panel if i may in the legislation that passed in the senate there is a mandate  three billion gallons of cellulosic fuel being produced by the year two thousand and sixteen but there are no earlier deadlines in the legislation there are no earlier timetables for one billion two billion heading up to three billion that is a very good point in fact there has been a fair amount of discussion within industry about that point it is hard to project what the number will be so it is difficult to try to put a number down on a piece of paper all of the projections are big fan of ethanol most of the counties in my congressional district in the milwaukee suburbs are under a reformulated gas mandate a few of them are not and the experience that we during the winter so that any fuel savings through the use of reformulated gas ends up being eliminated as a result of the lower gas mileage and by burning more fuel to get to where you are going my constituents end up putting more particulate pollution in the air the result of the market working is that there are a number of entrepreneurs that have put gas stations in right across the county line in the  nonreformulated gas area and they started going from four pumps and now a couple of them are up to sixteen pumps because again the market is working even though there is not that much of a price differential so it is a quality differential that gatto whether you favor a repeal of the zero dollars fifty four cents a gallon tariff that we put on sugar based ethanol that largely comes from brazil and if so why and if not why that brazil operates six months a year and during the growing season down there they are consuming much of the product that they are manufacturing and that that is left available for export they do find a way to either send it here or overseas mister sensenbrenner now my next question is address important market driver today mister gatto i do not as well again this is one of the most important drivers to show that the united states has a commitment to the long term success of this program mister sensenbrenner let me just respond with this observation market i think is now well matured and i get very very fearful when i hear major ethanol producers saying we need both a continued subsidy and we need to have the protection that prevents sugar based ethanol from coming into this country without a rather large tariff applied on it this is kind of double protectionism and the consumer ends up paying for  that in the end now you know i personally think that the subsidy that the taxpayers give the ethanol production is corporate welfare you are a beneficiary of that corporate welfare the corn farmers who end up selling a lot of corn to you folks end up having a price advantage because of the tariff that we place on the import of sugar based ethanol in brazil now if this is receiving the blender's credit the market is such that the oil companies are keeping that which is in fact to help create new markets so it is an important element to open these new markets up again we don't receive the benefit of that thank you i wanted to ask all the panelists this question if you could each of you respond we know that biofuel production spans the entire globe unlike fossil fuels it seems as if every country can produce  associated with fossil fuels that is one question and if yes how can we prevent this from occurring and then two how do we separate biofuels productions from fuels used from the agricultural market needed for foodstuffs and to combat hunger and just further that what we are talking about is a transition to next generation programs when you start to look at the impact of cellulosic ethanol for example you see a dramatic shift in terms of how these facilities are sited where these facilities are sited one could never imagine for example in massachusetts building an ethanol plant that would be able to service the community there today we can talk about whether it is wood waste cranberry bogs or a variety of other  materials congressman sensenbrenner talks about the fact that corn ethanol has had some issues with respect to wisconsin interestingly when we start looking at paper mills and sawmill waste and logging opportunities that have been going on in this country and the jobs that have been lost as a function thereof this is an opportunity for us to gain back those jobs to reinvest into those areas so we are talking about a broad proliferation of these facilities so to the market issue so we are talking about some several thousand plants that would need to be built throughout the united states not giving any one company necessarily the specific strength to dictate price terms or otherwise i think it is important to emphasize the triple bottom line whenever we are talking about fuel production and sales people profit and plan it some of the principles that are outlined in my written testimony from sustainable biofuels alliance  actually outline what we can be doing to avoid the pitfalls of transferring our issues from petroleum oil to biofuels i do have to agree with you know as far as food having varied feedstocks is the way forward so what we were referring to is advanced biofuels it is certainly i think the way forward and where we can end up in a way that we are not putting anything in danger and only creating a positive and the biomass is a regional issue different regions will develop different strategies for converting biomass into renewable fuel and has figure out how to integrate the production of cellulose into the production of other food crops or the forest industry thinking about how to produce cellulose for fuel either so i think as the ethanol as having a greater spread between the energy consumed to produce it and the energy it produces and if you do see that do you see corn based ethanol as a transition to thousand and five one of the key essential elements that you will note was the opportunity to create incentive under the mandate of basically two and a half to one and that was really an implication as to the environmental benefits provided that were provided as a function of ethanol plants today we have seen a dramatic improvement just in the water consumption alone for example we have seen anywhere from five to six gallons of water per gallon of ethanol drop down now to new latest and greatest at so all of these implications i think for both the mister gatto you talked about the use of other feedstocks in northern arizona we have a lot of forests and a lot of potential to use forest undergrowth as a feedstock and we are trying to move forward with that right now  damage by not being able to see far enough down the road i am interested in any advice you can give to us on how we might foresee unanticipated consequences and avoid congress doesn't move very quickly the science you work in actually moves quicker than we do so that one question that i would like to see you address how can we avoid that mister greene mister greene i mentioned earlier in my statement the idea of a low carbon fuel standard and i think the risk of picking a number of jerk my chain should we be mandating a separate standard for cellulosic as opposed to other ethanol i understand from the testimony the senate bill doesn't say just cellulosic should we be separating those out anybody who wants to comment mister gatto you wanted to speak to that last question mister gatto yes if i could just add to one point you made with respect to forest fires it is very interesting because the state of california actually had the quincy library group get together  was oil folks it was people in the cellulose community and really tried to focus on this issue and clearing out the underbrush and doing an effective job on trying to manage what was really fueling these fires so i point out that was a key component to this and  drive the markets to next generation biorefineries by using the latest and greatest technologies what we don't want to do is destroy the fundamentals of the ethanol industry i guess my foundation would reside in the following way and that is that if it the country and i want to state for the record my strong disagreement with the statement of the ranking member mister sensenbrenner that the tariff and the blender's credit together constitute corporate welfare i think it unfortunate that when we are trying to promote protection for taxpayers leveling a playing field and achieving important policy objectives related to energy independence that such a statement would be  made from such a distinguished and long serving member of congress particularly as it relates to leveling a playing field and driving a market that is good for a number of policy objectives and taxpayers let me build on that an endres in your testimony you stated that ethanol is selling at one dollar fifty five cents per gallon and conventional gasoline is selling at over two dollars but that not all refiners are capitalizing on the economic advantages of ethanol blending so if ethanol is so much cheaper than a measure to drive them that way given that we have had tax incentives the blender's credit for a number of years before we had the renewable fuel standard of the energy policy act of two thousand and five would you agree that not only do we need  agree with that mister gatto absolutely i think the most important thing for the committee to realize is that ethanol right now is at a transition point and without a very aggressive campaign to expand the rfs in two thousand and eight and through two and ten what you are going to see is the investment community absolutely run from this space we have already seen it we have had a record pace with which we were building plants we have now seen that over fifty percent of the new plants that were to be built have been put aside we have seen certain banks in this space have now started to take their teams that were focused on biofuels and move those teams into other areas of business so it is an absolute imperative  to earlier plants do you agree with the statement that technological advancements will also increase beyond twenty one point eight percent reduction as it relates to reducing greenhouse gas emissions mister endres absolutely there has been work within the industry that shows in abroad imprudent biomass harvesting would cause soil erosion water pollution habitat destruction while also substantially reducing the carbon sequestered on land now much of the excitement about biomass that i hear of from where i am and other parts of the country centers around dense perennial grasses that use very little water or fertilizer and can be harvested year after year without cultivation so if we can achieve this it doesn't sound like the scenario that you are painting in your models out there that are very exciting with the mixed perennial grasses and crops just because we have those models doesn't mean that we will use them it is easy to envision switchgrass  becoming a monoculture being bred to have a lot of above ground biomass much lower root structure these are the pressures that the marketplace will put on farmers and breeders unless we put larger three hundred and twenty two square miles it is a huge city one of the largest cities geographically in the country we have one e service station it is in south kansas city so if you land at the airport you are somewhere in the fuel vehicle and you want to get it you know there are not many people who are going to drive forty five minutes to get gasoline what can we do to help  signal that in fact the product will be available and our challenge today with e is that it gets less mileage because the vehicles don't optimize for the octane in the vehicle so we need to discount that fuel in order to make it available  commitment from our country to shifting away from using oil as a primary transportation energy to using alternatives that is the signal to the market to oil companies to the gasoline fuel so it is kind of a chicken and egg problem but we do believe that autos will come out and produce more efficient flex fuel vehicles once they see the market is there for them and that in fact the economics will significantly improve and therefore the blender's credit could be a short term kick start to making this work mister gatto this is not a supply issue nor is it a price issue i think it is an issue of access and one where  know to the extent that the consumer had the opportunity to truly understand that if they went and bought that car that chevy impala for example and had a place to go and fill up that they would do so more often it is quite interesting if you travel through brazil and look at the service stations down there they have two signs they have a sign talking about ethanol and the ethanol price and they have the petroleum price and down there in fact the amount of ethanol that is being consumed is well over sixty percent of the total consumption testimony because i just got done writing a book talking about the great potential benefit of biofuels and i am glad i wasn't totally wrong so you sort of comforted me particularly mister gatto's reference to president kennedy because we named the book apollo's fire after basically that whole concept i want to ask you in that vein aren't we just pathetically short of the real challenge here as to what we really need to do to get this going i mean last night i was talking to a group about this issue and i was sort of bragging about all the great stuff we are doing and this lady stood up and said you guys are pathetic you are doing one tenth of what you really need to do to get this job done looking at what is going on in the ecosystem right now i sort this year so the capital is ready to flow in and willing to be put to work but there is a clear question today because of concern over a lack of demand for the product mister inslee is there any reason we wouldn't statutor about requirements for pumps when i talked to folks in brazil they told me look you will never get this done unless you really have some requirement for people to put in pumps because as long as one entity has control of a fossil fuel base and that be the community at large was saying can we create enough ethanol to satisfy the need we did that in two years so the problem is not supply the problem is not investment the problem is that the investment community is unsure  whether or not this truly is going to be something sustainable and so you can make the product you can make it available to the consumer at a price that is certainly far more competitive than gasoline in many instances the problem is if you don't control the pump you don't control what comes out so i would say absolutely it is an imperative that if we are talking about an expansive rfs we also have to include the ability to put the cars on the road and create the opportunities for customers to be able to use the product  can't find it at pumps i would love for you all to put us out of business because i don't want to be spending time doing that i would love every band to find it at a flying j or any truck stop and fuel up we can spend our time doing other things about here solving global warming i think the issues that are being debated right now on the energy bill improving vehicle fuel economy performance making our electric sector cleaner through use of renewable electricity when you put a package together like that with suddenly the potential for biofuels becomes much greater because for using less fuel and our economy is getting cleaner then again a round of biofuels are going to go a longer way to clean up the atmosphere doing their share  so i think the package approach that is being discussed is absolutely critical and so i think an important component will be support for basic research and development of these technologies which will really be a driver for the next stage of biofuels the gentleman's time has expired i just want to point out here that in massachusetts we have one hundred and fifty thousand flex fuel vehicles right now driving around and one pump which makes an awful long line at the gas station so we definitely have to solve this problem people are buying the vehicles and then have no place to go to buy fuel for it gentleman from new york mister hall mister hall thank you mister chairman i would just follow up on what you are saying by remarking that some might consider this a hoax perpetrated on the american people by the automobile industry which advertises that you are doing something green by buying a flex fuel vehicle when in fact you can't get the fuel in most parts of the country so with that in mind i hall and perhaps combining that with incentive for the oil companies and i say oil because as mentioned before if that is their primary product they don't really have that much incentive unless they are heavily invested in biofuels  that it will then be considered to be excess profit and they have a choice of paying it as an excess profit tax or investing it in pumps that provide blended fuels there must be some way of going at this from both ways to motivate th deal going on to do that in order to make to develop technologies that will be able to make use of plants which can be grown in all regions so what this is going to require is working with the agricultural community as well as the research community to develop the appropriate cultivation techniques and the proper ideal crop for a particular area i think we need to have more integration between the agricultural community and the agricultural workers and the research community that is developing these technologies ethanol has the opportunity to quadruple that because of the number of plants and more importantly we are talking about taking these facilities and moving them into communities very similar to your colleague in new york where rather than focusing necessarily on switchgrass we might be talking the paper sludge from the area mills we might be talking about taking the mixed wastepaper that is coming from the municipal streams so all of these become opportunistic and we start looking at what the origins of these feedstocks and how they can complete the cycle mister mcnerney thank you i understand that total biodiesel production is rather limited due to acreage and crop limitations and so on how d am not sure that there is a differentiation necessarily one of the interesting things and maybe don can speak to this that is emerging is the opportunity to take one of the byproducts that comes from an ethanol plant and actually that to extract biodiesel so again the context here is when you look at an ethanol plant today it is truly a biorefinery of the future it is taking everything that comes in that front door and creating products that are renewable and sustainable in nature so what comes out of an ethanol plant is something called ddgs which is a high protein cattle feed that product also has the possibilities of being turned into biodiesel and taking an even higher protein value product say however that the total amount of available vegetable oil and the crops that we know that produce vegetable oil around the world is substantially less than the amount of cellulose that we know is in the world and the important thing be careful as we encourage this factory and try to bring along quickly that we don't lock ourselves into one technology one conversion pathway such as biodiesel one molecule such as ethanol we need to focus on the benefits that we want and let the marketplace figure greene well i think biodiesel is a prime example of how it can be both done in a wonderful way and in a very destructive way we have heard earlier about family farmers small farmers  r students using waste oil producing vegetable oil these are great examples of community based agriculture reusing waste materials to make transportation fuel on the other extreme you  have palm oil being grown on rain forest land lands where they burned off the rain forest burned the peat soil the greenhouse emissions from that conversion process outweigh any benefits you get from avoidin oil for hundreds of years so the extremes here are pretty stark and we need to again focus on the benefits that we want and make sure that we are picking those and not trying to tell farmers how to grow take thirty seconds to respond to my earlier question and then mister greene if you could comment on your testimony where bioenergy feedstocks must not be grown or extracted from public forest lands we have a lot of slash piles in the black hills national forest and i just want you past about the importance of making conservation cool and i think that is true for concerns about climate as well your efforts particularly among younger generations will help us in our policy objective propel the consumer demand in particular a reasonably subsidized method of encouraging use is there anything else that can be done to encourage thank you let me ask mister greene and mister gatto to address this issue of how a low carbon fuel standard would work mister greene cautioned us not to choose a particular technology but do it based on performance perhaps both of you could tell us how that should or should not work mister greene sure as you know the idea of the low carbon fuel standard is to get a goal for the transportation fuel industry and say we want you to reduce the average greenhouse gas emissions from all the gallons of fuel you sell california is targeting a ten percent reduction by two thousand and twenty a gallon of fuel renewable fuel that so it drives the market forward also allows competition among technologies the different diesel alternative technologies we heard about ethanol butanol electricity all the different technologies to get to compete on the benefit they provide the marketplace key that i would like to stress here is we are looking at corn today which is a very very good example of what we could do it is a great improvement over where we are today with oil cellulosic ethanol is an extraordinary improvement over that and we have an opportunity to do more food in the middle of a trip there are opportunities for conversations with truckers and i wouldn't be surprised if they and the teamsters and trucking companies might be interested in these possibilities there might be another way of getting at it getting the word out is a big part of the problem and when i found out that i could buy biodiesel for my own home it was just me finally going hey i think i will call my fuel oil company i picked up the phone in dover plains new york and i asked and they said sure we have got twenty percent soy blend  a strong renewable fuel standard in it you have given us some of the other issues that we have to deal with as well obviously the collateral environmental effects that we will have to build in protections and also the incentives to make sure that the pumps are out there so that people who are buying these flex fuel vehicles have a place that they can then take advantage of this new fuel so your testimony has been extremely helpful to us in helping to propel us forward towards producing this legislation before the