May 28, 2009

Obama Encourages Growth In New Types Of Biofuel

President Barack Obama said on Wednesday that the corn-based ethanol industry needs to remain viable until new types of biofuels can be commercialized as quickly as possible, Reuters reported.

Obama wrote in a letter to a group of farm-state governors that he is committed to moving as quickly as possible to commercialize an array of emerging cellulosic technologies so that tomorrow's biofuels will be produced from sustainable biomass feedstocks and waste materials rather than corn.

Ethanol from corn makes up most of the biofuels currently used in the U.S., and the government now wants to boost production of renewable fuels made from non-food crops like switchgrass and plant waste left over from harvesting grain.

Obama said in the letter that the transition will be successful only if the first-generation biofuels industry remains viable in the near term, since biofuels help reduce climate-changing greenhouse gas emissions and reducing the need for importing oil while creating jobs.

High corn prices, lower oil prices, and overcapacity have overwhelmed the ethanol sector and new types of biofuels are currently more expensive to produce than corn-based ethanol.

Concerns over how to measure the impact of land-use change on the environment have been hotly debated by regulators and lawmakers. Such concerns include emissions released when corn production displaces other crops and how to give farmers the incentive to turn forests into cropland.

The Governors' Biofuels Coalition told Obama in a letter earlier this year that poor market conditions have threatened the development of new types of biofuels, and asked the President to put forth a vision for biofuels and establish a task force on the debate over biofuels' greenhouse gas emissions.

The Obama administration established that task force in early May.

The coalition pleaded with Obama to expand the market by increasing the maximum allowed limit for blending ethanol with gasoline to 13 percent from the current 10 percent level.

An industry request to increase the blend rate will be decided by the Environmental Protection Agency by the first of December.

The next generation of biofuels will be successful "only if long-standing artificial barriers to market expansion" are removed, Obama said in the letter.