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Inside the Beltway: Key Ethanol Issues to be Decided in 2010
by Eric Washburn

As we close in on the one-year anniversary of the Obama Administration, it is a good time to take stock of its accomplishments regarding the American biofuels industry.

When President Obama was elected a little over a year ago, the biofuels industry was in tough shape. Profits were down – in fact, many plants were operating in the red. The industry was under considerable attack by the Grocery Manufacturers Association, food processors, environmental groups, and others. And it was facing the prospects of an Environmental Protection Agency poised to release a proposed Renewable Fuel Standard (RFS) rule that unfairly and unscientifically penalizes biofuels for a theoretical and unproven link to tropical deforestation.

Since then there have been victories and defeats. On May 5, 2009, Obama signed the Presidential Biofuels Directive, establishing a Biofuels Interagency Working Group (BIWG) to be co-chaired by the Secretaries of the Departments of Agriculture and Energy and the Administrator of the U.S. Environmental Protection Agency. The directive established three priorities:

  • Developing the nation’s first comprehensive biofuel market development program;
  • Coordinating infrastructure policies for biofuels; and
  • Identifying new policy options to promote the environmental sustainability of biofuels.

While the work of the BIWG is far from over, the very fact that the President signed the order to establish it sent a very important signal to the biofuels naysayers: this Administration stands behind the American biofuels industry. At the same time, unfortunately, the EPA was allowed to publish its proposed RFSII rule, which included the controversial, and in my view indefensible, indirect greenhouse gas emission penalty. The agency followed up by holding a peer review of its so-called science by asking a number of hand-picked allies whether they thought that EPA did a good job, with predictable results. That hurt.

2010 will be a watershed year for the biofuels industry. The Volumetric Ethanol Excise Tax Credit (VEETC) will be up for reauthorization in Congress. EPA will determine what midlevel blend of ethanol, beyond E10, will be allowed for use by conventional automobiles. The RFSII rule will be implemented by EPA. Finally, DOE will complete its current round of testing of higher ethanol blends.

Resolving these issues in a manner that encourages more biofuels production will foster greater energy security for America, the creation of high-skill, high-wage green jobs in the biofuels sector, and progress toward a clean energy economy. The BIWG is the ideal forum within the Administration for ensuring such a result.

© American Coalition for Ethanol, all rights reserved.
The American Coalition for Ethanol publishes Ethanol Today magazine each month to cover the biofuels industry�s hot topics, including cellulosic ethanol, E85, corn ethanol, food versus fuel, ethanol�s carbon footprint, E10, E15, and mid-range ethanol blends.
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