Energizing Rural America: How the Energy Bill Helps Us All
By William A. Steel
National Grange President
When Congress passes a bill, a lot can be lost in the numbers. Dollar signs
and pages sometime overwhelm the actual text of a bill, causing the people
who are directly affected to lose sight of why legislation was actually
passed in the first place.
The mammoth Energy Policy Act of 2005, recently passed by Congress, fits
comfortably into this description. Within the 1,700-page document, issues
ranging from daylight savings time to tax breaks are thrown together and
eventually lost in the magnitude of the text.
The greatest criticism of this legislation is that it does little or nothing
to immediately address the short-term problem of rapidly escalating prices
for gasoline, diesel fuel, home heating oil, propane, and natural gas. For
good or bad, that is as much a result of the federalist and separation of
powers’ philosophies built into our Constitution by the Founding Fathers.
They wanted to create a bias toward a legislative process that did not act
too swiftly in the heat of passion and that addressed problems in the long
run rather than producing short term fixes to the problems of the day.
This legislation certainly demonstrates both of these biases toward lengthy
and complicated deliberations and long-term policy choices to the detriment
of constructive policy ideas regarding the energy price crisis at hand.
However, what should not be lost in this legislation are the positive,
long-term effects it will have on farmers and those living in rural
communities. Many of the provisions - directly or indirectly - benefit rural
areas, a part of the country that is sometimes overlooked when it is time to
set constructive federal policies.
One of the most significant benefits is the new Renewable Fuels Standard
established in the new energy bill. By federal mandate, renewable fuels
usage will increase to 7.5 billion gallons by the year 2012. This mandate
will increase the demand for corn (ethanol) and soybeans (biodiesel),
driving up the price of these commodities and creating a better market for farmers. Both large and small producers will benefit from this mandate, with
a biodiesel tax credit of up to 10 cents per gallon, with up to 15 million
gallons of production given to small producers to help balance competition.
Many of America’s families, especially those on fixed incomes, struggle to
pay their natural gas and electricity bills. High natural gas prices also
translate into huge costs for the typical farmer.
The domestic exploration and production of natural gas is another provision
designed to help farmers. For the first time in decades, the federal
government will be authorized to do a comprehensive survey of natural gas
deposits that lie off our nation’s coasts.
Current government estimates predict that there is a 15-year supply of
natural gas beneath our coastal waters, but no one knows for sure. In
addition, special tax provisions will help pay for development of new
supplies of natural gas derived from abundant deposits of coal, as well as
for new facilities to store liquefied natural gas.
Input prices for fertilizer and other growing agents are directly linked to
the price of natural gas. This expansion of domestic supplies of natural gas
will drive down costs for things like fertilizer, saving farmers money while
better using an already proven natural resource.
Rural communities will benefit from the $800 million earmarked in the
recently passed energy bill for an innovative new bond authority created to
help in the financing of renewable electricity projects by rural electric
cooperatives, municipal governments, and tribal investments. This provision
allows consumer-owned electric companies to issue bonds with zero percent
interest.
The “interest” paid on the bond comes, instead, in the form of federal tax
credits to the investor. This new, creative source of financing will
increase investment in consumer-owned electric companies and will directly
benefit the rural areas where these companies are predominantly found.
Although some publications have erroneously reported that the energy bill
provides few rewards for farmers, the National Grange strongly supports the
passage of the Energy Policy Act of 2005 and its solid investment in the
future of rural America. The Energy Policy Act of 2005 helps to solidify
renewable fuels as a staple of America’s energy use, while also reducing
costs of natural gas and making investments in consumer owned electric
companies more appealing. All of these provisions directly benefit farmers
and rural communities, and they will continue to steer rural America toward
a positive and prosperous future.
William Steel is the President of the National Grange, America's oldest
rural and agriculture advocacy organization. Founded in 1867, today Grange
activities include and serve farm and non-farm, rural families and
communities on a wide variety of economic, educational, legislative, and
family issues.
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