President Barack Obama will be inaugurated the forty-fourth president of the United States in January. He will be confronted immediately with a number of challenges, including restoring the economy, balancing the budget, and addressing climate change.

On many of these issues, we have a fairly clear sense of the direction that President Obama will take. We expect another economic stimulus bill early in 2009, we expect to see middle class tax cuts as part of a budget reconciliation bill, and we expect to see him push for legislation to cap greenhouse gas emissions. On biofuels policy, we can gain some insight into his likely upcoming agenda by looking at what he has done in the past.

As a U.S. Senator, Barack Obama was a strong supporter of biofuels. Along with Senator Tom Harkin, he introduced legislation to establish a low carbon fuel standard, expecting that this not only would lead to greater use of biofuels, but also to ensure that the nation’s vehicles emitted fewer greenhouse gases in the future. It is very likely that as President, Obama will again look for an opportunity to enact a low carbon fuel standard. The biofuels industry needs to be prepared to engage on this issue and help ensure that it is designed in such a way that it’s fair and encourages greater use of ethanol.

Recognizing that Congress was likely to take up a low carbon fuel standard, the American Coalition for Ethanol commissioned the firm Global Insight to undertake a study of the main element of a low carbon fuel standard: lifecycle greenhouse gas emissions analysis. The study, entitled “Life Cycle Analysis of Greenhouse Gas Emissions Associated with Starch-based Ethanol,” has just been completed and is now on the ACE website for the industry to review.

ACE asked Global Insight to do the study so that it can better understand the issues associated with determining ethanol’s “carbon footprint” and how that footprint will affect ethanol’s competiveness in future U.S. transportation fuels markets. It has become clear to ACE that the future of energy policy in the United States and throughout the world will be shaped by efforts to reduce emissions of greenhouse gases. Low-carbon energy supplies will be increasingly favored over highly carbon-intensive supplies. As a result, the ethanol industry needs to get very smart about carbon regulation and be prepared to reduce its carbon footprint so that it can play a key role in these increasingly sophisticated low carbon energy markets .