Ethanol producers are claiming a significant victory after the federal government last week bolstered their long-standing claim that ethanol is friendlier to the environment than gasoline.
The U.S. Environmental Protection Agency issued new rules and targets for biofuels called the National Renewable Fuel Standard.
The EPA concluded that growing, harvesting, making and transporting corn-based ethanol generates 20 percent less greenhouse gas than producing gasoline.
"It's a confirmation of what we've known all along," said Jeff Broin, president and CEO of Poet, an ethanol manufacturer that has its marketing arm in Wichita.
"And oil will continue to get worse with more production from tar sands and oil shale, while ethanol is trending in a positive direction."
The net result of the new rules will be to strengthen the case for biofuels and to encourage long-term investment, said Greg Krissek, director of government affairs for Colwich-based ethanol plant designer and manager ICM.
"It sets out a number of provisions that gives the investment community strong support for the future," he said.
Some environmentalists criticized the government's methods of calculating environmental impact, saying the Obama administration is catering to farm interests.
In an earlier draft of the standard, the administration had said that corn-based ethanol output should be limited because its direct and indirect greenhouse gas emissions exceeded renewable fuel standards.
"The numbers are inconsistent with the great bulk of analyses by others, which consistently find that emissions from indirect land use change for crops grown on productive land cancel out the bulk or all of the greenhouse gas reductions, but I will have to study the results," said Tim Searchinger, a research scholar at Princeton University and an author of articles critical of corn-based ethanol.
EPA Administrator Lisa Jackson defended the new guidelines, saying that she was confident that "we weren't dumbing down the standard to favor any particular industry or... outcome."
Krissek said the new calculations are a recognition that ethanol isn't pushing farmers to plant on non-farm ground, which would increase greenhouse gas emissions.
The fuel used in ethanol production largely comes from higher yields on existing fields, Krissek said.
The EPA rules leave intact the goal set by law earlier of 36 billion gallons of renewable fuels by 2022 — more than triple the 11.1 billion gallons in 2009, almost all corn-based ethanol.
But the EPA envisions that as biofuel-making methods and materials improve, costs and environmental impact will shrink.
The new EPA rules call for phasing out corn-based ethanol in favor of so-called "advanced biofuels," such as ethanol made from sugar cane or biodiesel made from soybeans, and cellulosic ethanol made from farming waste and wood chips.
Advanced biofuels produce 50 percent fewer greenhouse gases than gasoline, and cellulosic ethanol is 60 percent less, the EPA said.
However, the switch to these better biofuels is moving more slowly than the ethanol industry promised.
The 2007 law originally specified 100 million gallons of cellulosic ethanol in 2010. The EPA regulations puts that to a more realistic 6.5 million gallons this year, all produced in pilot plants.
But Poet said it is making progress. It has lowered the cost of a gallon of cellulosic ethanol from $4.13 to $2.35, Broin said, and will build a commercial-size plant when it gets the cost below $2 a gallon.
The EPA said the expanded use of renewable fuels is expected to cut greenhouse gas emissions by 138 million metric tons when the program is fully implemented in 2022. The reductions would be equivalent to taking about 27 million vehicles off the road.
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