New Ethanol Coalition Fights To Save Federal Biofuels Support

Eight biofuels groups have formed a coalition to coordinate messaging to combat calls to limit a federal mandate for renewable fuels because of the drought. The drought has raised the profile of the renewable fuel standard, which requires 36 billion gallons of renewable fuels to be blended into traditional transportation fuel by 2022. That rule requires 15 billion gallons of corn-based ethanol to be blended into traditional transportation fuel by 2022. The remaining 21 billion gallons of that rule will be filled by advanced biofuels such as cellulosic ethanol, which is not yet produced at commercial scale.

Various lobbying groups, particularly industrial livestock producers and the petroleum refiners, argue this requirement should be waived because of the drought, which they say has caused the price of corn used for food and animal feed to skyrocket. The new organization, called the Biofuels Producers Coordinating Council, aims to defend the renewable fuel standard.

Several lawmakers representing livestock producers and dairy farmers have argued against the corn portion of the rule, which they say is contributing to high feed prices. But they have offered support for the cellulosic portion of the rule.

Representatives from the Advanced Biofuels Association, Advanced Ethanol Council, Algal Biomass Organization, American Coalition for Ethanol, Biotechnology Industry Organization, Growth Energy, National Biodiesel Board and Renewable Fuels Association will comprise the coalition.

Ethanol refiners already have responded to market signals by cutting back ethanol production because of high corn prices. Some believe that corn speculation has more to do with high prices than the RFS. With corn stocks shrinking, commodities traders are banking on corn futures in hopes of a strong rebound when the drought ends. (The Hill, 8/5/2012)