NEWS

Ethanol proposal has stopped investments in advanced biofuels, industry tells senators

Christopher Doering
cdoering@gannett.com

The Obama administration has halted investments in advanced biofuels plants following its proposal last year to reduce how much renewable fuels must be blended into the country's fuel supply in 2014, an executive representing the industry told Senate lawmakers Tuesday.

"What the (Environmental Protection Agency) proposal did, first the leaked version in October and then in November is frozen everything," Brooke Coleman, executive director of the Advanced Ethanol Council, told sympathetic lawmakers on the Senate Agriculture Committee. "Every single one of my companies. There are no exceptions."

The EPA, which oversees the country's Renewable Fuel Standard, proposed in November cutting the fuel requirement in 2014 to 15.2 billion gallons of ethanol and other biofuels, 3 billion gallons less than Congress required in a 2007 law. As part of that, EPA proposed requiring 2.2 billion gallons of advanced biofuels, including agricultural waste, wood and grass, to be used in 2014, far below the 3.75 billion outlined in federal law.

Coleman said if the EPA raises the levels in its final 2014 rule, the advanced biofuel industry would benefit. "If that's done we will recover and we will recover well," he said.

The final rule is expected to be issued by the EPA in late spring or early summer.

After years of delays and millions of dollars spent ramping up production, three large-scale U.S. cellulosic plants will open this year. DuPont Cellulosic Ethanol, which is building a 30 million gallon per year cellulosic ethanol plant near Nevada, Iowa, will use corn stover as its feedstock when it ramps up production.

Jan Koninckx, DuPont's chief on cellulosic renewable fuel, told lawmakers the fuel will initially cost more before the price comes down.

"The product will at first . . . be more expensive than corn ethanol and more expensive than fossil fuel but over time this will come down," Koninckx said. "We continue to anticipate to be competitive with oil at about $80 per barrel."

Lawmakers outside of ethanol producing states have proposed to end or significantly overhaul the Renewable Fuel Standard.

"I don't know what would happen if you put the Renewable Fuel Standard to a vote today in the United States Congress," Sen. Heidi Heitkamp, D-N.D. "We'd like to think we'd maintain it. . . but that may not be factual."

One measure, introduced by Sens. Dianne Feinstein, D-Calif., and Tom Coburn, R-Okla., would greatly diminish the importance of the Renewable Fuel Standard by removing the component that requires fuel to be made from corn. Smaller mandates for advanced biofuels such as cellulosic would remain in place. Others would cap how much ethanol could be blended into gasoline at 10 percent.

Iowa, the country's largest ethanol producer, has 42 refineries capable of producing over 3.8 billion gallons annually, with three cellulosic ethanol facilities under construction.