Normally money directed towards biofuels research would be considered a win for rural America. But the funding may be the beginning of the end for the ethanol industry, according to one top agricultural Committee member.
This week the President announced the U.S. Departments of Agriculture, Energy and Navy will invest up to $510 million during the next three years in partnership with the private sector to produce advanced drop-in aviation and marine biofuels to power military and commercial transportation.
Increased use of advanced biofuels is a key component of the Administration’s energy security agenda, but there is currently a lack of this manufacturing capability for next-generation drop-in biofuels in the United States. To accelerate the production of bio-based jet and diesel fuel for military and commercial purposes, Secretary of Agriculture Tom Vilsack, Secretary of Energy Steven Chu, and Secretary of the Navy Ray Mabus have developed a plan to jointly construct or retrofit several drop-in biofuel plants and refineries. This effort will help address energy security and national security challenges, and will provide economic opportunities in rural America.
The joint plan calls for the three Departments to invest a total of up to $510 million, which will require substantial cost share from private industry – of at least a one to one match.
House Agriculture Committee ranking member Collin Peterson, D-Minn., is opposed to the idea, and apparently has even lobbied against DOE Secretary Chu’s desire to use drop-in fuels for the military.
Ethanol is currently blended with gasoline; drop-in fuels would be placed directly into the gasoline supply. Peterson said drop-in fuels would be costly and would require continued government support.
Peterson states in an interview with the Duluth News Tribune, that if an ethanol plant cost $200 million to build, it would take another $300 million to retrofit it to produce drop-in fuel. And production would be just two-thirds what the ethanol plant produced.
Plant material costs for the new drop-in fuel could also be prohibitive. Peterson says Obama’s administration suggested materials such as wheat straw for a feedstock, but it may not be available in places where the plants likely would be built. And farmers would want $65/ton for the material, but $35/ton is likely the “most a production facility could pay and still make a profit” for feedstocks.
Peterson claims Chu believes ethanol is “an outdated, outmoded technology that we should abandon,” the Duluth News Tribune quotes Peterson as stating.
Policy is one of the most important issues facing farmers today, but often the most difficult to digest. Jacqui Fatka has a passion to decode the often difficult world of agricultural policy into terms understandable for today's ag players.
Fatka joined the Farm Progress team as E-Content Editor in August 2003 after graduating from Iowa State University. Prior to full-time employment with Farm Progress, she interned at Wallaces Farmer magazine, Iowa Sen. Chuck Grassley's press office and the Iowa Pork Producers Association and freelanced for National Hog Farmer. She also worked as a public relations consultant with Iowa Industries for the Future, an effort to bring together major players in the biorenewables industry.
Currently Fatka is a staff editor at a sister publication, Feedstuffs. For Farm Futures she regularly tells the story of ongoing agricultural policy changes. Her byline can also be found on management profiles.
Fatka grew up on a grain and livestock farm near Atlantic, Iowa. She currently lives in central Ohio with her husband Eric, and their three children - Josiah, Spencer and Avonell.
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