In the last year we have seen the devastating effects of record fuel costs on our nation’s economy. Families face challenges in filling up their car or truck, while farmers have seen their fuel input costs rise dramatically, which impacts the prices of agricultural products all Americans purchase at the grocery store. Across the nation, Americans are calling for increased energy production here at home. I believe that second-generation cellulosic ethanol can help significantly reduce our dependence on imported sources of energy and lower gas prices at the pump.

Corn-based ethanol has been a success story for rural America. It has expanded the market for corn and created good paying jobs in rural communities. Most of all, it has had a real impact on reducing consumer fuel prices. Cellulosic ethanol has the power to replicate this success in the Corn Belt and beyond, and I am excited for its future.

Cellulosic ethanol, which is produced from non-edible biomass such as wood chips, prairie grass, and corn stover, extends the capability for ethanol production to additional regions of the country where it was not previously possible. As cellulosic technology advances, we will see biorefineries spring up in all corners of the country, which will foster economic development and reduce ethanol transportation costs.

The 2008 Farm Bill accomplished several important victories for cellulosic ethanol. Most importantly, I worked to champion a bipartisan provision to create the Biomass Crop Assistance Program, which provides cost share and per-acre rental payments for the production of energy-dedicated crops. The program also authorizes temporary payments for each ton of biomass delivered to a local biorefinery. This new program will be critical as we work to produce renewable fuels in addition to what is being produced from corn-based ethanol production.

There are still some hurdles cellulosic ethanol must overcome, however. In July, long-time ethanol opponents took on the 2007 Energy Bill’s Renewable Fuels Standard (RFS), which mandates the use of 15 billion gallons of ethanol by 2015 and 36 billion by 2022 (21 billion of which must be cellulosic). In addition to a public relations campaign, anti-ethanol forces asked the Environmental Protection Agency (EPA) to repeal the RFS, which would have choked ethanol production and increased our dependence on foreign oil. I joined a bipartisan coalition of Senators who encouraged the EPA to stand by America’s ethanol producers, and I applaud EPA’s decision to dismiss the waiver request by the state of Texas.

In addition to upholding the RFS, Congress should act to strengthen it. Under current law, cellulosic ethanol produced from biomass gathered from our national forests and most private forestland does not count toward satisfying the new RFS requirement. Cellulosic ethanol production could create jobs in areas near national forests and help us lower fire danger by clearing out the dangerous accumulation of forest debris. I have introduced legislation that would change the definition of renewable biomass to cover waste material removed from national forests – in keeping with forest management plans.

While ethanol currently accounts for roughly seven percent of our nation’s overall fuel consumption, we are fast approaching the limit of how much ethanol can be consumed in non flex-fuel engines. This limitation, commonly referred to as the “blend wall,” will create a problem for our nation’s renewable fuels market because the federal government only allows E10 to be used as a gasoline additive in everyday automobile engines. To put this into perspective, the overall market demand for E10 ethanol is 12 to 14 billion gallons per year.

Currently, our nation’s ethanol producers are on track to produce roughly 9 billion gallons by the end of this year. So, in the next few years, we will soon reach the market saturation point for E10 ethanol – despite the fact that the RFS calls for 15 billion gallons of ethanol use by 2015. To address this “blend wall” situation, in September I led a bipartisan group of Senators in calling on the EPA to certify the use of higher blends of ethanol such as E20 and E30 for use in everyday automobile engines , a very reasonable step that will further expand the market for ethanol and reduce our nation’s dependence on foreign energy.

Ethanol and other biofuels are a cornerstone of our nation’s long-term energy strategy. Cellulosic ethanol technology has the capability to bring ethanol production to new areas, thus creating jobs and expanding the portfolio of biomass that can be used to create home-grown energy as we try to reduce the 0 billion dollars that we pay foreign countries for our energy needs. Leaders at all levels of government should work with the renewable fuels industry to further educate the public about the importance of biofuels as a way of creating jobs, lowering energy costs, and reducing our dependence on foreign oil. I look forward to continuing to work with our nation’s agriculture producers, industry leaders, and my colleagues on both sides of the aisle to ensure that the renewable fuel industry continues to grow.