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Vilsack on E15 Passage and Gulf Oil Spill

posted on June 4, 2010


Hello, I'm Mark Pearson. U.S. employers added 431,000 positions to their payrolls in May, marking the 5th consecutive month of job growth.

That's the biggest net gain in jobs in a decade, but most of the positions were temporary workers hired to conduct the census. Private employers, the backbone of the economy, added just 41,000 jobs, much less than the previous month.

The growth in jobs, coupled with the fact that several hundred thousand people stopped looking for work in May, pushed the national unemployment rate down two-tenths of a point to 9.7 percent.

Earlier in the week, the Commerce Department announced orders to U.S. factories increased 1.2 percent in April as strong demand for commercial aircraft offset weakness in other sectors.

And the big-3 U.S. automakers all reported double-digit sales increases in May, helping the industry post its 7th consecutive monthly gain.

The United States is the world's largest automobile market and the ethanol industry wants their product to play an increased role in fueling the nation's 250 million registered passenger vehicles.

Proponents claim federal regulations permitting a maximum blend of 10 percent ethanol to 90 percent gasoline, commonly known as E-10, threatens future expansion. And they're calling on the Obama Administration to raise federal standards to a 15 percent blend or higher.

I sat down with the Obama Administration's "point man" for rural affairs Friday and asked Secretary Vilsack about prospects for E-15.

Mark Pearson: "As we speak we've got the gushers still going on in the gulf. The president is down there right now. I know you've talked about it, the number of issues affecting us if the spill moves over into the straits by New Orleans. So, that could be another issue the Department will be taking up. We'll talk about that in a minute but what -- when you're talking about biofuels obviously E-15 is the first step. What are your feelings on that happening this year?

Sec. Tom Vilsack, USDA: "Well, I -- I think that's going to happen. I think the question is, 'where's the cut-off, if there is a cut-off, in terms of vehicles that can and cannot be -- use E-15 effectively?" The worst thing we could do for the industry would be to basically have a blanket E-15 all vehicles and you start putting it in a very late model -- older vehicle and it doesn't work and it's a black-eye for the industry. So, we need to make sure the testing is right, but I'm convinced it's going to happen. I'm convinced it's going to happen this year.

But even if it does happen then the question is, what are the feed stocks that are going to get us beyond the 12 to 13 billion gallons that we have the capacity to produce today? How do we get to 36 billion gallons? How do we make sure it's a nationwide effort?

Why is that important because it creates political support for this industry? So, it makes it easier to have long-term commitments to tax credits or whatever financial incentives there are.

Right now it's perceived to be kind of a mid-western kind of thing. Well, there's a lot of strength for it in the Midwest, but it's -- it's tough to get the folks in California excited about it, for example, but if you have a nationwide effort then you might be able to have greater political support and you'll be able to build this industry jobs, capital investment, rural America, bringing back the relevance of rural America, it's every American.

Mark Pearson: "Coming back to the situation in the Gulf, and I know you're tracking it closely, and I know your departments are very aware of this, coated ships with oil moving elsewhere in the world running into problems. We saw it with Katrina. Should we have to shut those lanes down? Any idea what USDA's response would be or what the role would be?

Sec. Tom Vilsack, USDA: We -- we are monitoring this everyday and at this point -- at this point in time we don't see that the shipping lanes are necessarily going to be compromised. Obviously if they are then we are going to have to make sure that we can get product to wherever we're exporting and I will tell you our exports are tremendous this year. Ag exports are through the roof -- our first 6 months $59 billion record. Anticipate $108 billion for the fiscal year which would be the 2nd best year in ag exports in history. Every billion dollars of ag exports 8 to 9 thousand jobs. So, it's not only improving again a bottom-line for farmers but it's also making sure that we have jobs again primarily in rural America. So, we're a very anxious and very focused on expanding trade opportunities and I want to make sure the infrastructure is there to be able to meet the need and so far that's the case.


Tags: agriculture BP corn disasters economy Energy/Environment ethanol Gulf of Mexico news oil oil spills renewable fuels rural U.S. Secretary of Agriculture