White House to Step Up Ethanol Efforts
WASHINGTON -- The Obama administration on Tuesday will step up efforts to increase the availability of ethanol at filling stations and to speed up subsidies to struggling biofuel producers. But the trade-off is that the administration is also expected to propose a rule that could make certain biofuels look less climate-friendly.
At a news conference led by the heads of the Agriculture Department, Energy Department and Environmental Protection Agency, the administration is expected to announce the creation of an interagency group that will be charged with forging a plan to encourage the production of more automobiles that can run on high-level ethanol blends, and increase the availability of high-level ethanol blends at gasoline stations.
President Barack Obama is also expected to direct the Agriculture Department to expedite the awarding of loan guarantees to support the development and construction of more biofuel refineries.
But at the same time, the EPA is expected to propose measuring the greenhouse-gas emissions associated with biofuel production -- including emissions that result overseas when farmers world-wide respond to higher food prices by converting forest and grassland to cropland. The EPA decision could undercut the environmental rationale the ethanol industry has used to sustain support for its government subsidies.
In an effort to ease the sting of Tuesday's announcement, the administration scheduled a news conference to discuss not only the EPA rulemaking but also what it called Mr. Obama's "commitment to advance biofuels research and commercialization."
The question of whether biofuels help or harm the climate has been heating up for months in scientific, corporate and environmental circles. A study published last year in the journal Science found that U.S. production of corn-based ethanol increases emissions by 93% compared with using gasoline, when expected world-wide land-use changes are taken into account.
Some scientists and many biofuel proponents have challenged the Science study, saying it relied on unrealistic assumptions. There is also disagreement among scientists and economists over how to measure the impact of land-use changes in one country on land-use changes in another.
"We're ready to begin the debate" over how to measure ethanol's environmental impact, said Matt Hartwig, a spokesman for the Renewable Fuels Association. "But let's get it out there, so we can talk about it."
The efforts by environmental regulators to assess biofuels' impact on the environment comes at a difficult time for the ethanol industry. Demand for the corn-based fuel has been falling, as consumers have cut back on driving amid the economic crisis.
The plunge in oil prices from last summer's record high, meanwhile, has pushed down ethanol prices and cut producers' profits. Last month, an ethanol trade group petitioned the EPA to allow the ethanol levels in gasoline blends to be as high as 15%, up from the current 10%. Without the increase, the group said the U.S. won't be able to meet a congressional mandate requiring some 36 billion gallons of renewable fuel to be blended into the domestic fuel supply by 2022.
