EXCLUSIVE - Obama To Form Interagency Biofuels Group
Author: Timothy Gardner
NEW YORK - President Barack Obama will direct the heads of three US agencies to make the biofuels industry cleaner and encourage output of ethanol made from non-food crops, according to a draft memo obtained by Reuters on Monday.
The Biofuels Interagency Working Group, to be headed by the secretaries of the Environmental Protection Agency, the Department of Energy and the Department of Agriculture, will be asked to identify policies that would make biofuels more environmentally sound and encourage production of "flex-fuel" cars that can run on either gasoline or fuel that is mostly ethanol, according to the memo.
In addition, Obama will ask Agriculture Secretary Tom Vilsack to "immediately begin refinancing of existing investments in renewable fuels as needed to preserve jobs in ethanol and biodiesel plants, renewable electricity generation plants and supporting industries," according to the memo.
An industry source with knowledge of the memo said Obama will encourage Vilsack to speed up financing opportunities under the 2008 Farm Law. Those include loan guarantees for development of biorefineries and demonstration-scale plants that could be worth tens of millions of dollars, the source said.
The memo said biofuels have generated hundreds of thousands of new jobs and "generated hundreds of millions of dollars in new tax revenues for local state and federal governments."
The US ethanol industry has suffered scores of bankruptcies starting last October amid high corn prices, the credit crunch and a drop in fuel demand due to the recession.
As carbon markets develop, producers of grain-based ethanol may come under pressure to prove that their fuels cut emissions of greenhouse gases.
Environmentalists and some scientists say production of US biofuels from corn and other grains can drive out production of other crops. That may force farmers in other countries to burn down forests and clear land -- and create new sources of carbon dioxide, known as emissions from "indirect land use change" -- to grow those crops.
The ethanol industry, on the other hand, says advances in new seeds and fertilizers mean they can grow more corn and other biofuel feedstocks on the same amount of land.
Cellulosic ethanol from non-food sources like crop waste and fast-growing grasses and trees are expected to be lower in emissions, but are not yet made in commercial quantities.
The memo said Obama would request Vilsack to "encourage production of next-generation biofuels from biomass and other non-corn feedstocks," and to speed funding for producers to burn crop waste and other biomass at distilleries instead of fossil fuels at plants.
Obama will also ask the group to:
*Develop the country's first comprehensive biofuel market development program.
*Identify options to improve the environmental impact of the production biofuels feedstocks, taking into consideration land use, water efficiency and life cycle assessments of greenhouse gas emissions.
Separately the White House said it will hold a conference call on Tuesday with Vilsack, EPA Secretary Lisa Jackson, and DOE Secretary Steven Chu, in part to unveil a notice of proposed rule on the Renewable Fuels Standard on biofuels.
Industry groups, scientists, and environmentalists expect that the proposed RFS rule will examine whether and to what extent all biofuels cut emissions of greenhouse gases.
(Addtional reporting by Charles Abbott in Washington; Editing by David Gregorio)
© Thomson Reuters 2009 All rights reserved
Obama Faces Climate Test With EPA Rule On Ethanol
Author: Timothy Gardner
NEW YORK - President Barack Obama's administration will face a big test on fighting climate change when it seeks to determine if ethanol, the top US alternative motor fuel, cuts greenhouse gas emissions.
A trucker fills his truck at the fuel ethanol loading station at the GreenField Ethanol plant in Chatham, Ontario, April 10, 2008.
Photo: Mark Blinch
The Environmental Protection Agency is expected to release a draft rule as early as this week that measures carbon dioxide emissions from biofuels like ethanol and biodiesel after the White House's Office of Management and Budget finished its review last week.
The rule, known as the updated Renewable Fuels Standard, or RFS-2, will measure direct biofuel emissions -- those given off from production of the fuels and their burning in engines.
It is also expected to measure "indirect land use change" emissions which include any global warming pollution given off when US production of crops like corn for biofuels displaces other crops, pushing farmers around the world to burn down forests to grow them.
If the rule gives poor marks to corn ethanol for indirect emissions, it will be hotly contested by the industry and powerful politicians across the agricultural hub of the Midwest. Already 12 US Senators, both Democrats and Republicans, have written EPA Administrator Lisa Jackson saying that "erroneous indirect land use assumptions could hinder biofuels development."
Despite recent setbacks due to high corn prices and the credit crunch, US capacity to make ethanol from grains like corn jumped 60 percent last year. The growth was pushed by the 2007 Renewable Fuels Standard that set mandates for annual increases in the amount of biofuels to be blended into gasoline through 2022 in a Bush administration effort to begin to wean the country off foreign oil.
Critics of indirect emissions measurements says the science has not been adequately developed.
And Matt Hartwig, a spokesman for the ethanol industry group the Renewable Fuels Association, said the indirect emissions of gasoline should also be measured, especially because production of some of the remaining sources of oil, like the Canadian tar sands, can emit more carbon than conventional sources of petroleum.
After the EPA issues the draft rule it will have a period for public comments before the agency issues final rules. Environmentalists and many scientists, on the other hand, say the EPA rule will open up a public discussion that will eventually result in the best way to measure indirect emissions and control them.
"To ignore it is going to really tilt the playing field in a direction that is going to send the industry off in a direction that will have to be reversed later and will be counterproductive," Jeremy Martin, a senior scientist at the Union of Concerned Scientists' clean vehicles program said by telephone.
He said the EPA could help steer the industry away from grain-based fuels to cellulosic ethanol. That industry holds promise to make ethanol out of non-food crops like agricultural waste and fast growing trees and grasses. Production of cellulosic has so far been slow and the industry risks failing to meet the federal mandate to 100 million gallons of fuel into gasoline by the end of next year.
(Editing by Christian Wiessner)
© Thomson Reuters 2009 All rights reserved