USDA to help troubled producers
Obama also issued a directive to USDA to speed up federal investments in the biofuels sector that were authorized in the 2008 farm bill.
Federal aid includes loan guarantees for building and retrofitting biofuels refineries, grants for demonstration-scale projects, funding to help current ethanol plants replace use of fossil fuels by using biomass energy for their processes, and funding for biofuels producers to make next-generation biofuels from nonfood feedstocks.
More than $1.1 billion will be available, Vilsack told reporters in a conference call. He said USDA will also attempt to use its existing credit programs to aid restructuring of ethanol companies facing hard times. The sour economy and lower demand for gasoline have hit the industry hard, forcing some producers into bankruptcy.
Separately, Energy Secretary Steven Chu said the Energy Department will make available more than $786 million from the economic stimulus package for next-wave biofuels initiatives.
From DOE will come funding to demonstrate "integrated" plants that produce biofuels, byproducts, and heat and power in an "integrated" system; additional money for programs to support development of commercial-scale biorefineries for advanced biofuels; additional money for biofuels research centers established under the last administration; and other steps, Chu said.
EPA is posed to release proposed rules today to implement the 2007 expansion of the national biofuels mandate. The law requires biofuels, to varying degrees, to have less "lifecycle emissions" than gasoline.
Lifecycle emissions take into account feedstock production, refining and use in motor vehicles. The agency will include a measurement of emissions from land-use changes that stem from increasing biofuels production, such as clearing land for farming in other countries to make up for increasing diversion of U.S. crops to biofuels.
Biofuels' environmental footprint has come under increasing scrutiny over the past few years, with studies suggesting that "indirect" land-use changes will release stored carbon, a view that is highly controversial.
Under the 2007 law, corn ethanol must have 20 percent less lifecycle emissions than conventional gasoline, while advanced biofuels that eventually account for the rest of the mandate must be 50-60 percent better.
Jackson told reporters that corn ethanol would be 16 percent better. But she emphasized "pathways" for bettering the performance. "There are things that could be done to make corn-based ethanol more sustainable," said Jackson, who also called corn ethanol a "bridge" to new forms of biofuels and lauded its use as a way to displace oil imports.
The emissions requirement for corn ethanol would be largely symbolic, because it only applies to plants that began construction after the 2007 law was enacted, and existing or under-construction plants already account for most of the 15 billion gallon level.
The agency's plans for modeling indirect land-use changes are the most closely watched part of the rule and have been the subject of fierce lobbying of White House officials reviewing EPA's plans.
The biofuels industry says methods for measuring these changes are too crude to be applied at this point, while environmentalists say they must be considered, or else the mandate will spur ventures that worsen climate change. Jackson said that EPA will seek formal peer review of its methods for assessing the emissions from land-use changes.