Aug. 2--BLOOMINGTON -- The first national energy policy since 1992 has farmers and alternative energy supporters smiling.

The bill passed last week by the Senate calls for 4 billion gallons of ethanol, the U.S. fuel additive largely derived from corn, to be blended into the nation's fuel supply in 2006, increasing to 7.5 billion gallons by 2012.

E-85, a fuel blend that's 85 percent ethanol, also received a boost from the bill with the adoption of a 30 percent tax credit up to $30,000 for the cost of installing clean fuel equipment, such as an E-85 fuel pump.

The measure also pleased soybean growers with an extension of the current biodiesel tax incentive through 2008. The bill also provides a small-producer biodiesel tax credit of up to 10 cents per gallon for up to 15 million gallons of production.

"This energy bill increases our nation's target for renewable fuels. Increased production of renewable energy has to be a plus for the country and, if it uses my corn and soybeans, it has to be a plus for me as a farmer," said Earl Williams, president of the Illinois Soybean Association who farms in Cherry Valley, near Rockford.

The energy bill now goes to President George Bush, who has indicated he will sign the measure into law.

Already the fastest-growing corn product in the country, ethanol will be enhanced by the bill, said Roger Sy, president of the Illinois Corn Growers Association in Bloomington.

"Ethanol is already the fastest growing market for corn, so when you factor in a near doubling of today's market in the next seven years it will virtually crank up the Midwestern economy," he said.

Ethanol production will soar in the state, Sy predicted. "We have six (ethanol) plants in operation in Illinois now with 14 under consideration. Now (plant investors) can see that the need for ethanol is there," he said.

Another benefit for ethanol producers is continued refinement of the ethanol production process where by-products are used for animal feed.

An $80 million advanced-design ethanol plant has been announced for Griggsville in Pike County, where new technology is expected to reduce processing costs by 50 percent, said Frazier Barnes, a consultant on the Western Illinois Ethanol Project.

Sy, who farms in Newman, 35 miles southeast of Champaign, said it wasn't just an abundance of corn that makes Illinois well-suited to lead the nation in ethanol production. "We have the river and rails to transport our grain," he said.

While Illinois traditionally exports 40 percent of its corn, the percentage of corn going to ethanol has increased from 25 percent to 32 percent in recent years, said Sy.

"It's a win-win situation. Farmers have a market for their corn and consumers will see lower prices and cleaner emissions on the road," he said.

Solar energy also picked up support in the new bill.

"For the first time since 1985, homeowners who install solar energy systems will receive a tax credit worth 30 percent of the system cost, capped at $2,000," said Rhone Resch, president of the Solar Energy Industries Association in Washington, D.C. Businesses that purchase solar equipment will also receive a credit worth 30 percent of the system cost." The energy bill also provided for a two- year extension of the wind energy production tax credit while establishing investment tax credits for clean coal facilities.