EPA Denies Texas Request to Trim Biofuels Production

The U.S. Environmental Protection Agency denies a plea from the State of Texas to reduce the nation’s renewable fuel standard, an annual biofuels-production target critics blame for rising corn prices.

The EPA’s decision keeps the total volume of renewable fuels, such as ethanol and biodiesel, slated for blending into the fuel supply at 9 billion gallons (34.1 billion L) in 2008 and 11.1 billion gallons (42 billion L) in 2009.

The Texas waiver request sought to halve the 2008 biofuels target, saying earlier this year it was negatively impacting the state’s economy and driving up world food prices. Texas ranks as one of the nation’s top beef, dairy, poultry and domestic-fuel producers.

“The (biofuels) mandate is not causing severe economic harm,” says EP Administrator Stephen L. Johnson in a conference call with journalists. “Rather, (it) is strengthening our nation’s energy security and supporting America’s farming communities.”

Johnson says the EPA arrived at its decision after a much-detailed analysis, consultation with the U.S. Department of Agriculture and U.S. Department of Energy, plus a “careful consideration” of more than 15,000 public comments.

The EPA also examined the impact a waiver would have on ethanol use, corn prices, fuel prices and current renewable-fuels credits.

“The agency recognizes that a number of factors have contributed to high corn, food and fuel prices as a nation, and as a nation we must work to address these challenges,” Johnson says.

“The (biofuels) mandate, however, will remain an important tool in our ongoing effort to reduce America’s greenhouse-gas emissions and lessen our dependence on foreign oil in an aggressive yet practical way.”

General Motors Corp., a major supporter of biofuels use for transportation, backs the EPA’s decision.

“We feel it is valid to examine these concerns, but also feel ethanol’s contribution to these rising prices is overstated,” says Greg Martin, GM spokesman in Washington.

Martin reiterates GM’s effort to move biofuels production to a second-generation cellulosic ethanol made from non-food sources, “which will do a number of things to mitigate these concerns.”

GM intends to make 50% of its vehicles biofuels-capable by 2012. The auto maker has an estimated 4 million flex-fuel cars and trucks on the road today. Industry-wide, there are about 9 million FFV owners.

Combined with biofuels-capable vehicles from Chrysler LLC and Ford Motor Co., GM says the Detroit Three could displace 22 billion gallons (83 billion L) of gasoline over the next 10 years.

To help move the industry past first-generation feedstock, such as corn, GM has invested in two cellulosic-ethanol developers this year – Mascoma Corp. and Coskata Inc. Boston-based Mascoma uses a thermo-chemical process to make ethanol from non-grain sources, while Chicago-based Coskata leverages a gasification process.

The renewable-fuels standard, which President Bush signed into law last year with passage of the Energy Independence and Security Act, calls for the blending of 36 billion gallons (136.3 billion L) by 2022.

The act also includes a new corporate average fuel economy standard, which calls for the U.S. fleet of cars and trucks to achieve an average 35 mpg (6.7 L/100 km) by 2020.