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Tuesday, May 05, 2009

Obama stands by ethanol; EPA says it doesn't meet renewable standard, but should in future

During his campaign, President Obama was a supporter of ethanol made from corn, and he stuck to that stance today as three of his cabinet lieutenants announced "a plan to shield corn ethanol producers from the credit crisis, work with them to cut their use of natural gas and coal in ethanol production, and nudge the auto industry toward production of vehicles that can use ethanol at concentrations of up to 85 percent," reports Matthew Wald of The New York Times. (Read more)

Obama ordered the Agriculture and Energy departments and the Environmental Protection Agency to "aggressively accelerate the investment in and production of biofuels," according a press release from the Department of Agriculture. (Read more) Obama put Agriculture Secretary Tom Vilsack in charge of a working group that includes Energy and EPA, which Wald calls "a strong signal that the ethanol program remains a program for rural economic development."

However, the administration did "a balancing act," MSNBC reports, because EPA announced its conclusion that corn-based ethanol does not meet the new Renewable Fuels Standard set by Congress, which requires a fuel for emit 20 percent less greenhouse gas than gasoline. "But it also touted developing sources and promised a final decision would be made only after a science-based review," the network reports. "Future improvements in production technologies are expected to make ethanol and other biofuels more climate friendly so they can meet the legal requirement, said ... Administrator Lisa Jackson. The EPA found that ethanol produces 16 percent less greenhouse gases than gasoline — even if worldwide land-use changes are taken into account. The requirement for a 20 percent improvement in climate impact applies only to ethanol from future production plants and exempts fuel made at existing facilities."

For a good, succinct summary of the state of the ethanol business, from Liam Denning of The Wall Street Journal, click here.

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