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Ethanol: The Cycle Continues?

By Jim Chen at al.

The New York Times reported on Friday that ethanol producers are lobbying the federal government to increase the 10% cap on ethanol in most gasoline blends to as much as 15%.

Ethanol producers also argue that without higher blend levels, there will be no room for the development of advanced biofuels, like ethanol made from wood chips or biological waste. Congress has set a target of using 21 billion gallons of that type of ethanol and other biofuels by the year 2022.

As I have discussed previously, the renewable fuel standard (RFS) that is the source of the 2022 target is flawed and provides incentives primarily (if not exclusively) for the worst kind of ethanol ? that which is derived from food-related sources like corn. The claim that a higher ethanol blend today would in any way influence development of second-generation sources like cellulosic or algae-derived ethanol is dubious at best.

An increase in the current permissible ethanol ratio in gasoline blends would simply increase the amount of corn-based ethanol produced. Some ethanol plants are closing (again) across the country and other ethanol producers are at or near bankruptcy. An increase in the amount of ethanol that can be used in gasoline blends may help some of these companies, but in no way will it have a significant impact on second-generation ethanol research.

An increase in the amount of ethanol that can be permitted in current gasoline blends would be a repeat of the mistake made with the initial RFS ? it would create further incentives for corn-based ethanol, which adversely affects food markets directly and indirectly. If ethanol is going to be a viable and valuable alternative to fossil fuels, technological advancements are necessary. Any incentives to promote ethanol production should thus be targeted at advanced biofuels, not ethanol that comes from current production processes. Otherwise, the tactics don't match the strategy.

Full post as published by Agricultural Law on March 08, 2009 (boomark / email).