At the very least, the President is attempting to channel the huge taxpayer financed subsidies of agribusiness in a way that helps national security.
President Obama issued a directive this morning to Secretary Vilsack at the U.S. Department of Agriculture to “aggressively accelerate the investment in and production of biofuels,” by making use of renewable energy financing opportunities from the Food, Conservation and Energy Act of 2008 available within 30 days.
The order is an attempt by the President to make the U.S. completely free from importing foreign oil. It is also the beginnings of a transition away from corn-based ethanol to advanced bio fuels, as well as an attempt reduce greenhouse gas emissions that the EPA has identified as harmful. The estimated costs of the latest moves were not disclosed.
“President Obama’s announcement today demonstrates his deep commitment to establishing a permanent biofuels industry in America,” said Vilsack. “Expanding our biofuels infrastructure provides a unique opportunity to spur rural economic development while reducing our dependence on foreign oil — one of the great challenges of the 21st century.”
Vilsack also announced that he will help lead an interagency effort to increase America’s energy independence and spur rural economic development.
TheDetroitBureau.com was on a conference call with Energy Secretary Stephen Chu, Environmental Protection Agency Administrator Lisa Jackson and Secretary Vilsack when the announcement was made.
This looks to be the beginnings of a promised comprehensive energy policy that will cut across the vast federal bureaucracy to take back control of U.S. energy use from off-shore based sources that are clearly not our friends. At the very least, it is an attempt to channel huge taxpayer subsidies of agribusiness in a way that helps national security. The President, thus far, has been unsuccessful at trimming such politically popular subsidies, even as the national debt reaches monstrous, unsustainable proportions of the gross domestic product.
The last time such a policy was announced to make American independent of foreign oil was during the Carter administration, after the first oil crisis in the 1970s. In the ensuing decades, powerful lobbyists from the oil industry, to say nothing of 16 years of presidential rule by the Bush family, with their close ties to Saudi Arabia and the oil business, as well as the lack of political will by both Democrats and Republicans, derailed the plan. This failure has demonstrably hurt the security and economy of the U.S. in an age of terrorists, financed in part by oil dollars.
Increasing renewable fuels will reduce dependence on foreign oil by more than 297 million barrels a year and reduce greenhouse gas emissions by an average of 160 million tons a year when fully phased in by 2022, it was claimed.
On the call, Jackson announced that the EPA would establish four categories of renewable fuels, some of which would be produced from new sources. To address lifecycle analysis of greenhouse gases from such fuels, the EPA said they are soliciting peer reviewed, scientific feedback to ensure that the best science available is used prior to implementation.
President Obama also directed Secretary Vilsack to expedite and increase production of and investment in biofuel development efforts by refinancing existing investments in renewable fuels to preserve jobs in ethanol and biodiesel plants, renewable electricity generation plants, and other supporting industries; and making renewable energy financing opportunities from the Food, Conservation and Energy Act of 2008 available within 30 days.
These opportunities include:
— Loan guarantees for the development, construction, and retrofitting of commercial-scale biorefineries, and grants to help pay for the development and construction costs of demonstration-scale biorefineries;
— Expedited funding to encourage biorefineries to replace the use of fossil fuels in plant operations by installing new biomass energy systems or producing new energy from renewable biomass;
— Expedited funding to biofuels producers to encourage production of next-generation biofuels from biomass and other non-corn feedstocks;
— Expansion of the Renewable Energy Systems and Energy Efficiency Improvements Program, which has been renamed the Rural Energy for America Program, to include hydroelectric source technologies, energy audits, and higher loan guarantee limits;
— Guidance and support for collection, harvest, storage, and transportation assistance for eligible materials for use in biomass conversion facilities.
— Refinancing of existing investments in renewable fuels to preserve jobs in ethanol and biodiesel plants, renewable electricity generation plants, and other supporting industries; and
The Biofuels Interagency Working Group will also work to develop policies to increase flexible fuel vehicle production and assist in retail marketing efforts while also taking into consideration land use, habitat conservation, crop management practices, water efficiency and water quality, and lifecycle assessments of greenhouse gas emissions.
The direction set by the President to reduce our dependence on foreign oil is both understandable and logical. Moving away from fossil fuels to renewables is also a logical move. Even moving farm subsidies over to growing crops which may be used to produce ethanol…without creating a strain on the human or animal food chain is also a great idea. If biofuels can show a net energy surplus during production and can be made cost competitively, this is a wonderful idea. But the plan does not address several key issues.
Not all of the new cars produced today are capable of burning fuels with concentrations of ethanol in excess of 10%. Yes there are multi-fuel and Flex-fuel cars which can burn up to 85% ethanol (E85), but these make up a very small franction of today’s vehicle population. If we are serious about this, the government should mandate all new vehicles must be E85 compatible.
E85 fuel will not deliver the same fuel mileage as traditional gasoline because ethanol has less energy content per gallon than gasoline, so the EPA will need to address this in the new vehicle mileage standards.
Finally, because of the lower fuel mileage and higher cost of ethanol (E85) fueled vehicles, and the higher cost of vehicles with E85 compatible fuel systems, some incentive must be provided to consumers to make them buy such a vehicle instead of simply buying a gasoline burning model.
We seem to have addressed the fuel production end of the equation, but not the comsumer demand end. Without demand, additonal production will not solve our problems. There is actually a surplus of ethanol today…what we really need is to increase demand.
Bob,
The even more significant question is whether we should increase the demand for ethanol and other bio-fuels. Not to look like I’m callous to the concerns about global warming, nor questions about importing oceans of oil, I’m not sure a good case has been made that ethanol, never mind bio-diesel, are reasonable and rational alternatives. Each has its own case to be made, so let me stick to ethanol, for the moment. Certainly using food stocks, like corn, raises tough questions. Not only are we driving up prices for consumer goods, but there’s also the issue of how much energy — mostly in the form of oil and gas derivatives — go into the production of said food stocks. And we burn more alcohol fuel, on a volume basis, to go a set distance. Has ethanol been hyped because it really is a good alternative — or because GM, in particular, found a loophole to gain mileage credits it desperately needed to meet the Corporate Average Fuel Economy standard? Depending upon your viewpoint, you might argue that what we really need do is NOT to promote demand, especially if we continue handing a $1/gallon subsidy to big oil to keep producing E85.
That’s just one viewpoint. I could also argue in favor of bio-fuels, including cellulosic-derived ethanol. But the key thing is that we need discuss the basic merits of the fuels before we rush into programs that promote either their production or usage.
Paul A. Eisenstein
Bureau Chief, TheDetroitBureau.com