22 June 2010 18:09 [Source: ICIS news]
By William Lemos
HOUSTON (ICIS news)--In a land where superlatives are a way of life, none rings as true these days as when Americans talk about how much the country depends on energy it does not produce.
With only 5% of the population, ?xml:namespace>
Much has been said in
Ethanol is a prime example. After a promising start five years ago, fuel ethanol has gone from hero to villain and today probably ranks as the most controversial energy issue in
Who is to blame?
It depends on who you talk to. Ethanol makers say they have been persecuted by the oil and food industries because the former is losing market share to the biofuel and the latter can no longer buy corn on the cheap.
Critics counter that
While that debate could go on forever with no clear winner, one culprit on the sidelines should not miss its share of the blame: the government, for sending mixed signals to the market.
That started to change with the mass production of ethanol, the only realistic domestic alternative the
Like a bull charging out of the pen, the
But the intensity of that initial push is in contrast to the apathy seen in the past two years, as the fate of biofuels now seems consigned to a handful of lawmakers representing states that rely on the industry.
US biodiesel makers have been hardest hit by political inertia. That industry is on the verge of collapse after a six-month delay by Congress on a vote on a subsidy extension. That delay is despite the
Lack of political initiative could likewise spell disaster for the ethanol industry, which is seeking an increase in the limit of ethanol the
Industry groups last week warned that allowing the subsidy to expire could cost 112,000 jobs and force around two of every five
Legislation seeking an extension was introduced in April, but Congress has yet to look into the issue, said Julie Allen, a consultant with Kansas-based accounting firm Kennedy Coe.
An end to government support would also inhibit investment in second-generation ethanol production, the industry claims, saying second-generation ethanol will be vital for the
The ethanol industry is fighting a parallel battle to have the ethanol blending cap on gasoline lifted.
The industry wants the government to authorise blending of up to 15% (E15) to create additional demand and absorb growing production of the biofuel.
As with anything involving ethanol, the increase in the blend volume is a controversial issue. Opponents claim more ethanol in gasoline could interfere with vehicle performance and potentially void vehicle warranties.
The fate of higher blends rests with US Environmental Protection Agency (EPA).
The agency was originally expected to rule on the issue in December 2009, but postponed the decision to July and last week announced it was putting off the ruling until September.
Ethanol advocates have argued that a weakened
The outcome would be continued dependence on foreign crude oil with a new dependence on imported ethanol.
Not a good case for energy security there.
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