"Today we see why it is extremely necessary to move our country towards an increasing reliance on alternative sources of energy as opposed to carbon-intensive fossil fuels ... that contribute enormously to ever-present climate change," he said.
Concerns about impact of drought on fuel prices
By devastating corn crops, this year's scorching summer temperatures will also affect ethanol production.
"The tough conditions that the nations' farmers are having certainly will have an impact on ethanol production, and it may result in fewer gallons produced than estimated at beginning of year," said RFA's Hartwig. "But we firmly believe production is ... still on pace to exceed RFS2 requirements."
The RFS requires refiners to blend 15.2 billion gallons of renewable fuel sources in 2012 of which ethanol will make up the vast majority. The RFS also set a 15-billion-gallon cap on corn-based ethanol per year, which has urged the industry to look to feedstock alternatives, such as algae or wood and grasses and other cellulosic biofuels. Refiners are required to blend 2 billion gallons of advanced biofuels this year.
"From here on in, it's going to be advanced biofuels," said Douglas Durante, executive director of the Clean Fuels Development Coalition, speaking from a forum hosted yesterday by the American Council on Renewable Energy (ACORE). "So now the risk gets higher; the technology leap gets greater."
Political uncertainty has also made advanced biofuel production a challenge, he added. "We've had very inconsistent policy, and it's very difficult to figure out if we're committed to this thing."
Automakers producing flex-fuel vehicles have also been struggling to get a grip on where ethanol markets and regulations are headed. The results of the MIT study could complicate their strategy further.
"If an alternative fuel is not lowering prices to the consumer, the expectation is and historical evidence is that consumers won't respond. If it's not lowering prices at the pump, then there's no incentive for most customers to choose these high ethanol fuels (E85) that may cost more per gallon on an energy basis," said an auto industry expert who did not want to be seen as taking a public position on the issue.
"We're not opposed to biofuels in any way," he said. "Our concern is that it could undermine the consumer pull for these fuels. ... What's the value of spending billions and billions equipping vehicles to handle high flex fuels if the consumer is not going to continue to use that fuel?"
Reporter Robert S. Eshelman contributed.
Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500