Two issues critical to the future of the biofuels industry are now squarely before the Obama Administration: a petition to allow the use of ethanol blends of up to 15 percent and the decision to propose a rule implementing the most recent iteration of the Renewable Fuels Standard (RFS II).

Both of these issues have generated passionate debate within the Administration and among interested parties, such as environmental organizations, automakers, and small engine makers.

On March 6, a number of biofuels organizations, including the American Coalition for Ethanol, Growth Energy, the National Ethanol Vehicle Coalition, and the Renewable Fuels Association, and individual cellulosic ethanol producers such as Coskata and ZeaChem, formally submitted a request to the U.S. Environmental Protection Agency to allow ethanol blends of up to 15 percent to be used throughout the U.S. The data submitted along with the waiver request to justify the use of higher ethanol blends is compelling, and new data continues to be released by the U.S. Department of Energy that suggests that ethanol blends in the range of 10 to 15 percent are compatible with the existing automobile fleet.

Automaker and environmentalists understandably want to make sure that higher blends will not impair vehicle performance and/or result in higher emissions of air pollutants. Small engine makers continue to argue that blends above 10 percent will damage their products, although the ethanol industry advocates that small engine owners be provided a choice of fuels. A decision by EPA is expected within the year. Without approval to use higher blends, the RFS II targets will not be met.

The RFS II rule, in which EPA characterizes the lifecycle greenhouse gas emissions from biofuels, is no less controversial. The ethanol industry has been critical of the draft rule, which does not appear to account for greenhouse gas emissions associated with the protection of oil supplies and shipping routes around the world or the recent improvements in the efficiency with which modern plants convert starch to ethanol, which has been documented by researchers like Dr. Ken Cassman and others.

Environmentalists understandably want to ensure that all emissions are counted, including those related to activities in foreign countries. The best decision may be to go back to the drawing board and develop a more defensible model that is based on actual on-the-ground data of biofuels-related emissions and includes all emissions from petroleum. How the Administration resolves these issues will determine in large measure the near-term and long-term fate of biofuels in America.