South Dakota Energy
By Rep. Kristi Noem
People get the “Dakotas” confused all the time. I can’t tell you how many times people in DC have asked me about the impact of the oil boom in our state, having little idea that the Bakken oil field largely rests north of South Dakota’s border. Even without the oil reserves, however, our state plays a role in filling the nation’s gas tanks, contributing the resources needed to produce renewable fuels, like ethanol and biodiesel.
As many reading this know, I have spent most of my life growing corn and soybeans. These crops are staples of the American food supply, but these commodities are becoming a part of our domestic fuel supply too. With advances in technology, we are growing more on fewer acres and are using that efficiency to diversify the market. This year, about 26 percent of the soybean oil consumed in the U.S. will be used for biodiesel production and around 5 billion bushels of corn will be used for ethanol. Turning corn and soybeans into fuel not only opens the door for better prices and greater market stability, but also offers broader benefits for our national economy and security.
The biodiesel industry alone supports nearly 50,000 U.S. jobs and ethanol supports tens of thousands more. These are plant workers, researchers and engineers. They’re truckers and salespeople. They’re members of our community who turn around and support local economies, spending money at area businesses and supporting schools and infrastructure with their tax dollars. It’s a fuel that invests – and then reinvests again – in America.
On the flip side, around one-third of petroleum used in America is derived from foreign sources. This means the United States spends more than $300 billion each year on imported crude oil. Many times, the oil is coming from volatile areas of the world and countries that are wary of America’s continued prosperity. Every step we take toward energy independence is a step we take toward security. That’s why we need to invest in both fossil fuels and renewable fuels.
While biofuel production has grown quite a bit in recent years, it still makes up only a small portion of the overall market. Since our nation’s founding, America has invested in new technologies like this, offering help until they’re strong enough to stand on their own. Today, as part of an all-of-the-above American energy strategy, we must do the same for biofuels.
One of the ways in which we encourage biofuel growth is through the Renewable Fuel Standard – or RFS. The RFS sets annual goals for the amount of ethanol and biodiesel that must be incorporated into America’s fuel supply. The EPA has often fallen short of what Congress proposed, particularly when it comes to ethanol requirements. Last month, however, for the first time in a number of years, the EPA brought the RFS in line with congressional goals. Since the RFS is re-examined each year, we must continue to hold the EPA accountable, ensuring the agency makes American-grown energy a priority for the future.
Various forms of energy also have different provisions in the tax code. For biodiesel, we offer a $1-per-gallon tax credit, which can result in cheaper fuel at the pump. Legislation I’ve proposed would give more certainty regarding the tax credit’s availability while also adjusting how the support is distributed. The change would ensure the incentive is encouraging American biodiesel production, not the importation of foreign biodiesel – a move consistent with our goal of achieving American energy independence.
My number one responsibility is to keep the American people safe. Protecting economic opportunities comes in at a close second. By supporting homegrown fuels, we accomplish both while also distinguishing South Dakota as an energy-rich state.
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“…these commodities are becoming…” ? How many years is enough ? Drain the subsidy swamp !
Kristi is knowledgeable concerning geography? Oh, that accelerated bachelor’s degree from SDSU has paid off!
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