Agriculture Secretary Tom Vilsack urged Congress today to reinstate the biodiesel tax credit and extend the ethanol tax credit, while also announcing a range of federal assistance for renewable energy development through the Biomass Crop Assistance Program established in the 2008 farm bill.

"Domestic production of renewable energy, including biofuels, is a national imperative, and that's why USDA is working to assist in developing a biofuels industry in every corner of the nation," Vilsack said in a speech at the National Press Club. "By producing more biofuels in America, we will create jobs, combat global warming, replace our dependence on foreign oil, and build a stronger foundation for the 21st-century economy."

Vilsack's statement on the tax credits appeared to reflect recent discussions between the ethanol industry and White House chief of staff Pete Rouse about changes to the ethanol tax credit and protective tariff, both of which expire at the end of the year. Vilsack said the lapse in the biodiesel tax credit has caused a loss of 12,000 jobs. He also called for "a short-term extension" of the ethanol tax credit but declined to answer questions about proposals to lower the credit, saying that a "healthy discussion" about changes is taking place. Vilsack did not mention an extension of the tariff in his formal remarks, but said, responding to a question, "The tariff is likely to continue, but over time it is likely to be phased out."

Vilsack said the ethanol tax credit is still needed because it is a relatively new industry that requires more investment. Joel Velasco, the Washington representative of UNICA, the Brazilian Sugarcane Industry Association, said the U.S. corn-based ethanol industry is mature and does not need either the tax credit or the tariff. But Matt Hartwig of the Renewable Fuels Association said the industry is still in the development stage and needs the credit. Hartwig added that the tariff is only to cover the value of the credit and should be extended at whatever level the credit is extended.

The final rule for the Biomass Crop Assistance Program will be published in the Federal Register on Friday, and Vilsack emphasized today that the programs under it were funded in the 2008 farm bill and do not require further congressional action. The programs include reimbursements to farmers of up to 75 percent of the cost of establishing a bioenergy perennial crop for up to five years for grassy crops and up to 15 years for woody crops and assistance for the collection, harvest, storage, and transportation of biomass to biomass conversion facilities for two years. He also said that USDA will help pay for construction of 10,000 blender pumps and storage systems to make renewable fuels more easily available to consumers.

Vilsack also announced the opening of regional biomass research centers to accelerate the development of a commercial advanced biofuels industry. The centers will be located in Madison, Wis., Lincoln, Neb., and in Alabama, Georgia, Arizona, Washington state, and Oregon. He said that USDA's rural development division will announce assistance to biorefinery plant projects within 60 days and that USDA is trying to figure out whether it can make changes to its federal loan guarantee programs to make them more attractive to investors. Vilsack said, however, that changes to the loan guarantees will depend on whether "we have the capacity to do that," and also noted that changes would have budget consequences.

Throughout his speech, Vilsack emphasized the importance of renewable fuels to the longterm vitality and job creation potential in rural America. Noting that rural America has experienced population decline and higher poverty levels than urban areas, Vilsack said, "President Obama refuses to accept the notion that America's rural past predicts its future."