Obama Administration Tackles Ethanol Plans

The White House made its first major statement regarding its ethanol stance on Tuesday. Three Cabinet members outlined a plan that would protect corn ethanol producers from the credit crisis, work with them to reduce their use of natural gas and coal in ethanol production, and push the auto industry to create vehicles that can use ethanol at concentrations of up to 85%, The New York Times reported.

The Secretaries of Agriculture and Energy, Tom Vilsack and Steven Chu, and the administrator of the Environmental Protection Agency, Lisa Jackson, announced during a press conference the formation of a “Biofuels Interagency Working Group,” which will be comprised of the three agencies.

Through this group, the federal government presented several goals, including helping to refinance existing ethanol and biodiesel factories whose owners were having difficulty obtaining credit, guaranteeing loans for building new biorefineries and expediting funding to help producers of cellulosic crops (non-food crops or the non-food portion of plants usually grown for food).

Scientists disagree on whether using ethanol from corn really reduces carbon emissions, and by how much. Jackson said the reduction amounted to about 16%, but added for both ethanol and biodiesel the carbon footprint could be reduced further if the energy needed to create the fuels came from burning plants rather than fossil fuels.

President Obama put the Agriculture Department in charge of the multi-agency effort, a sign the ethanol program remains a program for rural economic development.

The industry was looking for a signal of support, especially after the collapse of gasoline prices and the widespread backlash against corn ethanol because of a belief that it was helping to push food prices higher, The Times reported.

“There is over $1.1 billion of opportunity here, created by the Congress, to assist in building biorefineries, in helping existing refineries convert from fossil-fuel power to renewable power,” said Vilsack, referring to stimulus money and other funding.

The money also can be used to “create opportunities for producers, to receive assistance to produce new cellulosic crops and products,” Vilsack added.

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