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March 18, 2005

Governor Seeks to Reduce America’s Dependence on Foreign Fuels and Increase our Nation’s Energy Security

CHICAGO – Gov. Rod Blagojevich today announced his support for federal legislation to more than double the amount of ethanol used nationwide.  Under the bipartisan “Fuels Security Act of 2005,” introduced yesterday by U.S. Senator Richard Lugar (R-IN) and U.S. Tom Harkin (D-IA), ethanol use in the United States would rise from 3.7 billion gallons today to 8 billion gallons by 2012.  U.S. Senator Richard Durbin (D-IL) and U.S. Senator Barack Obama (D-IL) co-sponsored the legislation.  
“America’s national security is linked to our dependence on foreign energy, and our country’s economic growth is threatened by soaring energy prices.  We can reduce those risks and boost our self-reliance by doubling our production and use of ethanol as this legislation requires,” Gov. Blagojevich said.  “I offer my full support to Senator Durbin, Senator Obama and the others backing the Fuels Security Act.”
Production and use of ethanol, a renewable, cleaner-burning fuel, has been growing strongly in recent years due to lower ethanol production costs and requirements to meet Clean Air Act standards.  Regions of the country (including the Chicago area and the St. Louis area) not meeting air quality standards must reduce air pollution by using cleaner-burning fuels that contain ethanol or a petroleum-based additive known as MTBE.  Demand for ethanol has been on the rise since 19 states, including Illinois, have banned MTBE due to groundwater contamination problems.
The Fuels Security Act establishes a requirement to increase the percentage of renewable, domestic fuels, such as ethanol and biodiesel, in the nation's fuel supply.  The law would require that 4 billion gallons of renewable fuels be used in 2006, increasing annually until 8 billion gallons are used by 2012.  The new national system is a flexible program that does not require that any renewable fuels be used in any particular area or state.  Instead, oil refiners can use renewable fuel blends where it is most cost-effective.  The proposal also requires federal agencies to purchase ethanol-blended gasoline when “reasonably available at a generally competitive price.”
American ethanol production was less than two billion gallons in 2000 and has almost doubled since then to today’s level of 3.7 billion gallons.  Numerous new plants are planned throughout Illinois and the Midwest to meet the growing demand, bringing significant economic opportunity.  The proposed legislation sends a clear signal that demand for ethanol is on the rise and again demonstrates that ethanol plays a key role in reducing the nation’s demand for imported oil.  
The Renewable Fuels Association and more than twenty U.S. Senators have also announced their support of the proposal. 
“Enacting an 8 billion gallon standard would reduce foreign oil imports by more than 2 billion barrels through 2012,” said Bob Dinneen, Executive Director of the Renewable Fuels Association.
Gov. Blagojevich’s support of the Fuels Security Act is consistent with numerous other steps he has taken in just over two years to advance the ethanol and biodiesel industry in Illinois, including:
*        Announcing $1 million in Opportunity Returns funding for the National Corn to Ethanol Research Center at Southern Illinois University Edwardsville to support the center’s role in technological innovation to continue to reduce the costs of ethanol production;
*        Announcing $500,000 in Opportunity Returns funding to increase access to E-85, an advanced hybrid of ethanol, and allow more gas station operators to offer the 85 percent ethanol fuel;
*        Providing $4.8 million to the Lincolnland Agri-Energy Ethanol plant in Robinson, to help the plant succeed in closing on private financing for the project - the plant is now producing more than 40 million gallons of ethanol per year;
*       Signing an Executive Order requiring increased use of both ethanol and biodiesel by state employees, similar to the measure included in the federal proposal;
*      Within months of being sworn into office, the Governor also lobbied for and signed legislation to eliminate the state sales tax on E-85, allowing the fuel to retail for 10 to 15 cents per gallon cheaper than regular unleaded gasoline.


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