The biodiesel industry is still in its infancy; as such, we are unable to compete on a level playing ground with entrenched oil companies who enjoy massive subsidies. Back in 2005, Congress approved a $1 per gallon subsidy to the biodiesel industry. Profit margins on fuels are razor thin, and this subsidy allows us to begin to build a market for alternative fuels, which reduce our dependence on foreign oil, keep the air clean, and keeps money in the local economy.
This subsidy is set to expire at the end of 2009 and must be renewed. This year, I’m asking for your help to contact Senator Cornyn, our Senator on the Finance Committee, who is writing the Economic Stimulus package for Congress. Please let him know how important biodiesel is to you and our state, sending him an email (his staffers are firstname.lastname@example.org and email@example.com).
Here is the letter I sent:
I am contacting you as the Vice President for Membership for the Biodiesel Coalition of Texas (BCOT) http://biodieselcoalitionoftexas.org/ We are a Texas trade association comprised of 29 companies involved in the production, marketing, and distribution of biodiesel in Texas. I am also the owner of DieselGreen Fuels, a biodiesel distributor in Austin employing 6 people.
We understand that an extension of the biodiesel excise tax credit is being considered for the Economic Stimulus bill being debated in the Senate Finance Committee this week.
Given the economic impacts and job creation potential of the biodiesel industry to Texas and the Country, we certainly hope that Senator Cornyn will consider supporting an extension of the biodiesel excise tax credit in this bill.
Texas has recently become the nation’s leading producer of biodiesel. As such, the biodiesel industry has started to add significant value to theTexas economy. According to a study by Texas A&M (extrapolated for 2008 with estimated production at 100 mm gallons), biodiesel represents:
– Estimated $400 million in economic output
– 1,200 jobs
If the Texas industry produced at capacity in 2009 (536 million gallons)
– $3.7 billion total economic impact (Direct and Indirect)
– 10,000 jobs
According to the National Biodiesel Board, the biodiesel industry supports some 51,893 jobs; $4.287 billion of the Gross Domestic Product (GDP); displaced 38.1 million barrels of imported petroleum; generated $866.2 million in tax revenue.
Absent federal action to address the unprecedented credit and market crisis facing the industry, over 29,000 of these jobs could be lost in 2009 alone.
The members of BCOT appreciate your attention to this issue and hope Senator Cornyn will be able to support the continued growth of our industry in Texas by supporting the extension of the biodiesel excise tax credit in the Economic Stimulus bill.
Please let me know if you have any questions.
DieselGreen Fuels, Austin TX
My personal opinion is that subsidies are not a great long-term solution. In fact, I’ve publicly stated that the biodiesel subsidy goes more to the feedstock providers than the biodiesel producers. However, I fully support local, sustainable biodiesel business models who collect used cooking oil and recycle it into biodiesel. These micro-scale businesses can thrive with a subsidy, and may not survive in the short term without it. So I urge you to contact the Senator in support of this resolution, and support your local biodiesel company!