Corrected: US Senate to try to fix new ethanol mandate

07 February 2008 21:59  [Source: ICIS news]

Correction: In the ICIS news story headlined “US Senate to try to fix new ethanol mandate” dated 7 February 2008, please read in the third paragraph … of the total be advanced biofuels, including cellulosic ethanol … instead of … of the total be cellulosic ethanol …. A corrected story follows.

WASHINGTON (ICIS news)--A US Senate energy leader conceded on Thursday that biofuels mandates in the energy bill passed by Congress late last year are flawed and could disrupt US fuel supplies this year and perhaps tarnish the biofuels industry.

Senator Jeff Bingaman (Democrat-New Mexico), chairman of the Senate Energy and Natural Resources Committee, said the Energy Independence and Security Act (HR-6) and its renewable fuel standard (RFS) “risks taking the biofuels industry backward rather than pushing it ahead”.

Signed into law by President George Bush on 19 December, the law’s renewable fuel mandate requires US production and consumption of 36bn gal/year of bio-ethanol by 2022 and that 21bn/gal of the total be advanced biofuels, including cellulosic ethanol. Current US ethanol production is wholly corn-based and about 7bn gal/year.

The law’s mandate for biofuel consumption this year is 9bn gallons.

“While it appears likely that there will be enough ethanol and biodiesel production capacity to satisfy the [9bn gal] requirement, it is not clear how all of this biofuel will find its way into the fuel tanks of our cars and trucks,” Bingaman said in opening remarks at a hearing called to consider a legislative fix for the 2007 law’s shortcomings.

Charles Drevna, president of the National Petrochemical & Refiners Association (NPRA), questioned whether there will be enough ethanol available to meet the mandate for 9bn gallons this year and said is also is “most doubtful there is enough infrastructure available” to blend that much ethanol into the country’s fuel supply.

Drevna also testified that complications in getting sufficient ethanol to the retail level could raise fuel costs for consumers and that the large increase in the law’s ethanol mandate could drive price increases for corn and corn-derived foods.

Bingaman appeared to agree, saying: “Because the law was signed only weeks before the 2008 requirement came into effect, refiners had no opportunity to ensure that sufficient infrastructure would be in place to handle that much of an increase.”

Ethanol cannot be shipped through existing US fuel pipeline systems and is largely distributed by rail and truck to be blended with gasoline at distribution centres just prior to delivery to retail fuel stations.

Bingaman also said the 2007 statute’s mandate for specific biofuels technologies and feedstock limitations “could prove to be overly prescriptive”. 

“The fact remains that this kind of micromanagement is likely to make government policy look foolish in the long run,” Bingaman said of the law’s narrowly defined requirements.

“The question before us now is how to make the RFS work,” Bingaman said. “The cost of failure is high.  If we cannot produce enough ethanol and biodiesel to meet these aggressive mandates, while maintaining food and fuel prices that consumers can afford, taxpayers will blame Congress, as they should.” 

He also expressed concern that failure to meet the biofuels mandate will tarnish the image of the renewable fuels industry.

Bookmark Simon Robinson’s Big Biofuels Blog for some independent thinking on biofuels

By: Joe Kamalick
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