US refiners, petchems warn on ethanol policy

06 September 2007 20:58  [Source: ICIS news]

WASHINGTON (ICIS news)--US refining and petrochemical leaders warned on Thursday that federal policies to stimulate production of ethanol may jeopardise broader US energy interests by overlooking biofuel shortcomings.


The National Petrochemical & Refiners Association (NPRA) said that while biofuels have a place in the US energy future, the US Congress and other policymakers should not focus on ethanol to the extent that overall energy interests are neglected.


“There is a strong consensus that biofuels will play an important role in the nation’s energy future,” said Charles Drevna, executive vice president at the association.


He cautioned, however, that diverse energy resources are critical to US security interests.


US chemicals producers, which rely heavily on natural gas as a feedstock, and a broad range of other energy-dependent manufacturing interests have been pressing Congress to lift a 26-year-old congressional ban on oil and gas exploration and development along 85% of US ocean coastlines.


“We caution against ignoring the consequences of significantly increasing the federal mandate for a product [ethanol] that only now we’re learning has a number of drawbacks, both environmental and economic,” Drevna said.


The association cited concerns about corn-based ethanol and other biofuels raised by academics, environmentalists and other energy sector stakeholders. 


Association spokesman Bill Holbrook noted concerns that run-off from US corn fields - which require high levels of nitrogen-based fertilizer - is said to be driving increased pollution of major US coastal fishing areas, reducing catch yields.


He also cited reports that production of corn-based ethanol is so energy-intensive that it provides little or no net savings in carbon dioxide savings and consumes more energy than it produces.

The rising price of corn, driven by ethanol feedstock demand, and the cost to taxpayers in federal subsidies for biofuels production also were highlighted.


Holbrook said the association has raised these and other concerns about ethanol and other biofuels because the US Congress, which has just resumed business after its month-long August recess, is soon to consider a wide range of renewable fuels legislation.


Among other things, Congress is considering a major increase for an existing federal mandate for ethanol use in US transportation fuels.

By: Joe Kamalick
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