Obama Gives Ethanol High Five, Slaps It In the Face

obama corn biofuels ethanol subsidies photo

Just as the Obama administration is launching an interagency task force to boost the biofuel industry amidst an industry-wide slump, it is also preparing to rigorously measure the carbon footprint of biofuels, making them look even more controversial and environmentally risky.

The effort announced today, which will immediately assist the corn-based ethanol and biodiesel industries, would help reduce America's petroleum consumption by 11 percent and lower direct emissions of greenhouse gases equivalent to "taking 24 million cars off the road," said EPA administrator Lisa Jackson. But she described corn-based ethanol, the predominant biofuel in the U.S., as only a "bridge to the next generation of biofuels," adding that biofuels must "reduce greenhouse compared to the fuels they replace."

Even as they applaud the White House's moves, the powerful farm lobby and farm state politicians are readying for a fight.Steady Increase in "Better" Cellulosic Ethanol
The A new interagency task force, announced by the heads of the Agriculture Department, the Environmental Protection Agency and the Energy Department in a White House teleconference today, is developing policies to help biofuel producers as part of a congressional mandate to increase the volume of renewable fuel blended into gasoline from 9 billion gallons in 2008 to 36 billion gallons by 2022.

A related new draft rule under the National Renewable Fuel Standard calls for 15 billion gallons of traditional ethanol blending per year by 2015 and 16 billion gallons of cellulosic ethanol, or fuel made from non-food crops like switchgrass and fast-growing trees. The measures include encouraging production of "flex-fuel" cars that can run on either gasoline or biodiesel.

A slate of subsidies, credits and financing opportunities would also be given to the ethanol industry, which has long depended on government assistance, said Agriculture Secretary Tom Vilsack.

Under the 2008 Farm Law, these measures would include loan guarantees for development of biorefineries and demonstration-scale plants that could be worth tens of millions of dollars, as well as financial incentives for farmers and bio-refiners to cut their carbon footprints by using cleaner fuels.

In addition, Energy Secretary Steven Chu said $780 million would be allocated through the stimulus package to explore the development of advanced biofuels, like bacteria that behaves like diesel fuel when fed simple sugars, or fuels grown out of algae.

The net result, the agency chiefs said, was to make biofuels more prevalent and more environmentally sound.

Under the EPA's draft rule, now renewable fuels will be subject to thresholds for reductions in greenhouse gases compared to the fossil fuels they replace: 20 percent less greenhouse gas emissions for renewable fuels (ethanol) produced from new facilities, 50 percent less for biomass-based diesel and advanced biofuels, and 60 percent less for cellulosic biofuels.

How Biofuels Here Impact Land There
The measures that the EPA will take will include examining how growing biofuels crops drive farmers around the world to cut down or burn forests to clear more land for food production, a process that leads to higher greenhouse gas emissions. "This is indeed path-breaking work, said Administrator Lisa Jackson.

A measurement of "indirect land use changes" (ILUC) is also incorporated into California's Low Carbon Fuel Standard, which was passed last month. The rule mandates penalties for fuels that do not meet an average declining carbon intensity based partly on a modeling of how fuels effect land use. The ethanol industry has expressed displeasure with the ILUC measure, which it says is based on faulty assumptions. It has also complained that other biofuels were not adequately scrutinized.

Though it has lower immediate greenhouse gas emissions than fossil-based fuels, many have called corn-based ethanol a dead end for its global environmental impacts. A study by Dutch Nobel prize winner Paul Crutzen in 2007 found that the production of most biofuel, with the exception of sugar cane ethanol, had a "net climate warming" effect compared to conventional gasoline.

Using corn for fuel also tends to drive up food prices, which creates a strain on food supplies and contributes to poverty in developing countries.

But the biofuels industry, led by lobbying groups like the Renewable Fuels Association, counter that biofuels do not drive up food prices, and say that the science behind measurements of "indirect land use change" isn't adequately developed. “So far there’s been no defensible, indisputable proof linking biofuels to indirect land use change," the Renewable Fuels Association, said during its fight in California.

"The EPA is soliciting peer reviewed scientific feedback that includes the best available science," Jackson, the EPA chief, said today. The measurements will rely on satellite data and take into account estimated greenhouse gas emission from foreign crops as well as the seasonal timing of emissions, she said. "This is indeed pathbreaking work."

Biofuels producers have suffered in recent months, as credit has shrunk, consumers have cut back on driving and the global price of oil has plunged. After the world's largest ethanol producer went under in November, Valero Energy, the U.S.'s largest independent oil refiner, bought up their facilities at bargain prices. Across the U.S., one third of the nation's biofuel facilities -- like a recently built one in Nebraska -- are sitting idle.

But the ethanol industry has been lobbying hard to convince the White House to help. In December, the Wall Street Journal reported on the RFA's efforts to get $1 billion in short-term credit, and a $50 billion federal loan guarantee program to stimulate future investment and infrastructure expansion. It also requested that any automaker receiving federal bailout money be mandated to produce only flex-fuel vehicles that are capable of running on ethanol.

Obama's appointment of Vilsack as Agriculture Secretary was seen by some as a sign of his administration's strong commitment to the corn and ethanol industries, on whose planes Obama has flown before. As noted by Ken Silverstein, who described Obama's ties to Big Corn in a 2006 Harper's piece, an advisor on energy to the Obama campaign came from a group with heavy ties to ethanol courtesy of Tom Daschle and Bob Dole.

President Obama has asked the Department of Agriculture to begin giving assistance to ethanol producers within 30 days. The public will have 60 days to review the EPA's new biofuel standards.

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Obama Gives Ethanol High Five, Slaps It In the Face
Just as the Obama administration is launching an interagency task force to boost the biofuel industry amidst an industry-wide slump, it is also preparing to rigorously measure the carbon footprint of biofuels, making them look even more controversial

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