Date: 1982-09-28
Speaker: DE LA GARZA (democrat)
Chamber: H

Mr. Speaker. I yield myself such time as I may consume. Mr. Speaker. I rise in support of H.R. 6142. a bill to provide an impetus for the disposition of surplus stocks of agricultural commodities owned by the Commodity Credit Corporation in the form of alcohol fuels. H.R. 6142 provides specific authority for the processing of Commodity Credit Corporation owned stocks of agricultural commodities into alcohol fuels and for the disposition of such products to Federal agencies either to help them meet their immediate needs for transportation and industrial fuels or for storage for later emergency fuel uses. In addition. the Corporation is given authority to sell liquid fuels in commercial markets. The liquid fuels would be made available at a price as determined appropriate by the Secretary. notwithstanding any price restrictions that may be contained in other provisions of law. and in a manner that does not disrupt prices in commercial markets of liquid fuels derived from agricultural commodities. The dismal economic situation currently facing producers of U.S. grain commodities makes a priority issue of the need to develop additional domestic outlets for these commodities. H.R. 6142 offers the potential for creating substantial new domestic demand for grain. a goal. which. if realized. could lead to stronger and more stable prices for American producers. There are prospects for record grain production and carryover levels. which will increase acquisitions of grain under the price support activities of the Commodity Credit Corporation. There has been a revrsal in the long series of yeartoyear increases in U.S. farm exports. And the United States has not attained selfsufficiency in the production of liquid fuels. These factors combine to illustrate the wisdom of directing a significant portion of U.S. agricultural production toward fostering the continued growth of the young domestic alcohol fuels industry. Recent projections by the U.S. Department of Agriculture forecast a record production in the United States of major farm commodities. including corn (8.32 billion bushels). wheat (2.82 billion bushels). and soybeans (2.31 billion bushels). The 198283 season carryover estimated for corn alone is a record 2.8 billion bushels. which far surpasses historical levels. This anticipated production has reduced farm pries to severely depressed levels and sharply increased expected outlays for farm price support programs. Current price quotations in local markets for 1982 crops of wheat. corn and soybeans are well below $3.50. $2. and $5 per bushel. respectively. Recently. projected Commodity Credit Corporation outlays for its price support activities for fiscal year 1982 were doubled to about $12.75 billion and outlays for fiscal year 1983 were estimated at over $12 billion. The expected record crops threaten to tax the grain handling and storage system as never before. New storage facilities are being constructed at a rapid pace. and the Federal Government is approving !or commercial storage. facilities that were once con ered substandard and inadequat maintain grain in proper condition. Mr. Speaker. not only are pri stocks of grain held on the farm in commercial elevators accumula to record levels. Government stock farm commodities are also buil rapidly as producers forfeit to Commodity Credit Corporation g: used to secure Government price port loans. By the end of the 198! marketing year. TSDA projects t CCCowned stocks of corn will crease by at least 150 million bus] to nearly 400 million bushels. The firstyear cost to CCC of ass ing ownership of a bushel of corn is timated to be at least 50 cents bushel. In addition. CCC is likely own this grain. at substantial addit al cost. for some time given current strictions on its authority to dispos its stocks in commercial markets the prospects for continued depres farm prices. One of the primary reasons that riculture finds itself in a depres state is the deterioration in the f export outlook. The burden of rec agricultural surpluses has been c pounded by this reduction in the va of U.S. farm exportsthe first such duction since 1969. Export sales are timated to decline 8 percent or billion to $40.5 billion in the fi year just ending. In addition. cert commodities are experiencing a red tion in export volume. as well as val corn export shipments. for examl are at a 5year low. A mature alcohol fuels indus could serve as a model for current forts to promote the "value add production and export of U.S. goc For example. alcohol producers us the "wet milling" process can obt: from one 56pound bushel of corn. gallons of anhydrous ethanol. pounds of corn oil. 3 pounds of c gluten meal (a 60percent prot product). 14.5 pounds of corn glu feed (a 21percent protein additi. and 15 pounds of highgrade car dioxide. Finally. contrary to the curr widely held perception. sales of ga line/alcohol blend fuels have not clined in the face of the current glut and moderate gasoline prices. cohol blend fuelscommonly mar) ed today as "super unleaded with E anol" or "unleaded plus" rather tl "gasohol"-are attaining a steadily creasing share of the motor f market nationally and in the key a hol fuel consuming States. Nevertheless. the need for United States to become significar more selfreliant in the production liquid fuels remains urgent. desp substantial gains made in reducing troleum imports and the overall le of energy consumption in the U.S. cohol fuels. from renewable resour such as grain and crop residues. wi and wood residues. and wastes. can produced in a decentralized fash isid- and serve as a fuel extender or importo tant octane enhancing additive for vaegasoline. Such an effort could lead. as vateoutlined. to expanded domestic marand kets for U.S. grain. to lower Governting ment farm program outlays. to ins of creased employment and national ding income. and to Improved U.S. energy the security. rain The committee notes that Executive sup- Order 12261. signed by President 283 Carter on January 6. 1981. continues .hat to provide a framework under which in- the Federal Government may purhels chase and use ethanol blend fuels In Its vehicles. The Executive order um- statesthat. whenever feasible. Federal es- agencies. shall. In procuring unleaded per gasoline motor fuel. demonstrate a to "Preference for the purchase of gasoion- hol." The order further provides that re- "the Secretary of Defense with respect e of to gasohol use by the Department of and Defense. and the Administrator of .sed General Services with respect to gasohol use by other agencies. shall issue ag- such guidelines for the implementased tion of this Order as they deem approirm priate." The committee urges the SecOrd retary of Agriculture to use the man. Dm- date provided in Executive Order blue 12261 to facilitate the exercise of the re- authority granted in H.R. 6142 in es- making available to Federal agencies $3.3 the liquid fuels processed from stocks 3cal of Commodity Credit Corporation. amn Mr. Speaker. it Is rather unusual fir iuc- a single piece of legislation to jeal lue. with the range of problems which ple. H.R. 6142 addressesand at ainimal cost to the Government. I en~huslastitry cally urge my colleagues to support ef- the bill with their votes. ed" Mr. Speaker. I yield 2 minutes to the ds. author of the legislation. the gentleing man from Iowa . iin. (Mr. BEDELL asked and was given 2.5 permission to revise and extend his re1.7 marks. and to include extraneous orn matter.) ein Mr. BEDELL. Mr. Speaker. first. I ten would like to thank the chairman of ve). the committee. and. particularly. I )on extend my thanks to my colleague. the gentleman from Illinois . ent the coauthor of this legislation. for so- the work which he has done on this de- legislation. oil As has already been explained. H.R. Al- 6142. as amended. would authorize the ket- Secretary of Agirculture to provide for th- the processing of Commodity Credit han Corporation stocks of agricultural in- commodities into liquid fuels and agriuel cultural commodity byproducts. lco- The legislation further provides the Secretary with discretion to establish the the terms and conditions under which MY the Corporations stocks are to be . of made available for processing by liquid ite fuel producers. The liquid fuels prope- duced may be made available by the vel Corporation to Federal agencies either al- to help them meet their immediate ces needs for transportation and industriaod al fuels. or for storage for later emerbe gency fuel uses. In addition. the SecreIon tary Is given authority to sell the liquid fuels in commercial markets. provided any sale does not disrupt commercial markets for the liquid fuels. The measure also instructs the Secretary. in determining the feasibility of offering Corporation stocks of agricultural commodities for processing into liquid fuels and agricultural commodity byproducts. to consider the likely cost to the Federal Government of retaining ownership of the stocks in their original form. the impact of excessive supplies of Governmentowned stocks in depressing agricultural commodity prices. and the value and usefulness of the stbcks as liquid fuels and agricultural commodity byproducts. H.R. 6142 was approved by the Committee on Agriculture on a unanimous voice vote. and enjoys the support of 30 Members of the House. including the chairman of the Subcommittee on Fossil and Synthetic Fuels. Mr. SHARP. Prospects for record grain production and carryover levels. increasing acquisitions of grain under the price support activities of the Commodity Credit Corporation. a reversal in the long series of yeartoyear increases in U.9. farm exports. and the failure of the United States to attain adequate jelfsufficiency in the production of liquid fuels. confirm the need for directing a significant portion of U.S. agricultural production toward fostering the continued growth of the young domestic alcohol fuels industry. Recent projections by the U.S. Department of Agriculture forecast record U.S. production of major farm commodities. including corn (8.32 billion bushels). wheat (2.82 billion bushels). and soybeans (2.31 billion bushels). The 198283 season carryover estimated for corn alone is a record of 2.8 billion bushels. which far surpasses historical levels. This anticipated production has pressured farm prices to severely depressed levels and sharply increased expected outlays for farm price support programs. Current price quotations in local markets for 1982 crops of wheat. corn. and soybeans are well below $3.50. $2. and $5 per bushel. respectively. Recently. the estimate for projected Commodity Credit Corporation outlays for its price support activities was doubled to nearly $11 billion. The expected record crops threaten to tax the grain handling and storage system as never before. New storage facilities are being constructed at a rapid pace. and the Federal Government is approving for commercial storage. facilities that were once considered substandard and inadequate to miintain grain in proper condition. Not only are private stocks of grain held on the farm and in commercial elevators accumulating to record levels. Govbrnment stocks of farm commodities are also building rapidly as producers forfeit to the Commodity Credit Corporation grain used to secure Government price support loans. By the end of the 198283 marketing year. USDA projects that CCCowned stocks of corn will increase by at least 150 million bushels to nearly 400 million bushels. The estimated firstyear cost to CCC of assuming ownership of a bushel of corn is estimated to be at least $0.80 per bushel when commercial storage rates. transportation. and handling charges. forfeited interest on the loan and forgone firstyear interest revenue on the grain in CCC possession are considered. In addition. given current severe restrictions on CCCs authority to return grain under its ownership to commercial markets. as well as prospects for continued depressed farm prices in the near term. CCC is likely to own this grain. at substantial additional cost. for some time. One of the primary reasons that agriculture finds itself in a depressed state is the deterioration in the farm export outlook. The burden of record agricultural surpluses has been compounded by this reduction in the value of U.S. farm exportsthe first such reduction since 1969..In addition. certain commodities are experiencing a reduction in export volume. as well as value. corn export shipments. for example. are at a 5year low. The dismal prospects for resumed strong growth in U.S. export markets point to the need for developing additional domestic outlets for our grain production. The development of an established alcohol fuels industry offers the potential for creating substantial new domestic demand for grain. a goal which. if realized. could lead to strong and stable prices for American producers. A mature alcohol fuels industry could also serve as a model for current efforts to promote the value added production and export for U.S. goods. For example. those alcohol producers using the wet milling process can obtain. from one 56pound bushel of corn. 2.5 gallons of anhydrous ethanol. 1.7 pounds of corn oil. 3 pounds of corn gluten meal (a 60percent protein product). 14.5 pounds of corn gluten feed (a 21percent protein additive). and 15 pounds of highgrade carbon dioxide. In addition. wetmilling facilities have the flexibility to reduce their ethanol production in favor or producing high fructose corn syrup. In a "dry milling" facility. 2.5 gallons of ethanol and nearly 17 pounds of a 26- to 32percent protein material call dried distillers grain (DDG) remain after the process. According to a 1981 study by the U.S. Department of Energys Office of Alcohol Fuels. based on mid1981 corn prices. U.S. ONP would increase by "$1.89 for each bushel of corn diverted from the export market to produce ethanol." Similar studies have projected the increased employment. national income. and balance of payments benefits that would likely accrue to the United States if a strong alcohol fuels industry were established. Contrary to the current widely held perception. sales of gasoline/alcohol blend fuels have not declined in the face of the curent oil glut and period of moderate gasoline prices. As the information in the tables below relates. alcohol blend fuelscommonly marketed today as "super unleaded with ethanol" or "unleaded plus" r ither than "gasohol"-are attaining a steadily increasing share of the motor fuel market nationally and in the key alcohol fuel consuming states. U.S. gasohol sales In 1981 and 1982 1982: January........................... February......................... M arch.............................. April................................ M ay ................................. June ................................. July.................................. 1981: Gallons 80.747.000 94.129.000 110.515.000 110.030.000 113.250.000 118.000.000 121.000.000 January.......................... 50.705.000 February......................... 47.870.000 M arch.............................. 55.795.000 April................ 54.417.000 M ay ................................. 56.952.000 June ................................. 59.290.000 July .................................. 62.615.000 August............................. 57.820.000 September...................... 55.123.000 October........................... 56.651.000 November ....................... 70.029.000 December ....................... 86.021.000 Total ............................ 713.288.000 NOTE.-Information derived from sales recorded by the Federal Highway Administration.