UPDATE: EPA Issues Renewable Fuels Proposal

May 4, 2009 07:00 PM

via a special arrangement with Informa Economics, Inc.

Indirect land-use analysis; refinancing of existing renewable fuel facilities also part of today's announcement

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

UPDATE: See box below for highlights of today's news conference.

The Environmental Protection Agency (EPA) today unveiled their plans for the Renewable Fuels Standard-2 (RFS2).  EPA Administrator Lisa Jackson, along with Energy Secretary Steven Chu and USDA Secretary Tom Vilsack unveiled the proposal during a conference call this morning with reporters.

Here's a link to more information on what USDA announced today.

Here's a link to EPA information

The proposal will implement requirements under the 2007 Energy Independence and Security Act (Pub. L. 110-140) that require ethanol and other biofuels to reduce lifetime greenhouse gas emissions by 20 percent relative to gasoline. The law requires 36 billion gallons of renewable fuels to be included in the nation's motor fuel supply by 2022.

The Wall Street Journal previously reported that the EPA is expected to propose measuring the greenhouse-gas emissions associated with biofuel production -- including emissions that result overseas when farmers world-wide respond to higher food prices by converting forest and grassland to cropland.

The EPA proposal will rely on indirect land-use change analysis for a large percentage of total emissions from ethanol production. The EPA proposal will include a range of estimates for emissions from ethanol production based on factors such as whether coal or biomass is used to power the production system.

President Barack Obama will direct the heads of three U.S. agencies to make the biofuels industry cleaner and encourage output of ethanol made from non-food crops. The Biofuels Interagency Working Group will be asked to identify policies that would make biofuels more environmentally sound and encourage production of "flex-fuel" cars that can run on either gasoline or fuel that is mostly ethanol.

Obama has asked Vilsack to "immediately begin refinancing of existing investments in renewable fuels as needed to preserve jobs in ethanol and biodiesel plants, renewable electricity generation plants and supporting industries." Obama has encouraged Vilsack to accelerate financing opportunities under the 2008 Farm Bill, including loan guarantees for development of biorefineries and demonstration-scale plants.

Obama told Vilsack to "encourage production of next-generation biofuels from biomass and other non-corn feedstocks," and to speed funding for producers to burn crop waste and other biomass at distilleries instead of fossil fuels at plants.

Obama asked the group to:

-- Develop the country's first comprehensive biofuel market development program.
-- Identify options to improve the environmental impact of the production biofuels feedstocks, taking into consideration land use, water efficiency and life cycle assessments of greenhouse gas emissions.

Highlights from today's teleconference:

  • EPA's Jackson said the proposed rule would be available sometime this afternoon.
  • There is a "grandfather" clause in for existing ethanol production facilities.
  • Indirect land use will be incorporated into the analysis, and EPA's Jackson said the proposal specifically seeks peer review of satellite data, land-use and conversion issues, greenhouse gas emissions from foreign crops and more.
  • The proposed rule "lays out pathways" to include in corn-based ethanol moving forward. Jackson detailed that their analysis shows ethanol is 16% better than petroleum based gasoline in terms of greenhouse gas emissions.
  • There are also "pathways" identified in the proposal to help biodiesel meet the requirement of what officials said was a 50% reduction in greenhouse gasses.
  • USDA Secretary Tom Vilsack said he has been directed by President Obama to implement provisions of the 2008 Farm Bill within 30 days that would focus on building refineries, converting existing ones from fossil fuels to renewable sources of energy, to provide producers with the opportunity to examine their own operations to see how they can move away from fossil-based fuels and how communities can take advantage of renewable energy and fuels.
  • Vilsack also said he has been directed to take existing USDA credit programs and "immediately" assist struggling ethanol facilities.

Comments: Today's press briefing showed the Obama team is trying to have something announced for virtually every stakeholder.

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


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