The renewable fuel industry will be paying particularly close attention to this year’s election. As you might recall, the great ethanol boom of 2007 was the reaction to the federal government’s support of renewable fuels. A little more than one year later, corn-based ethanol has experienced a roller-coaster ride of political, investor and public support. As a result the industry has a tarnished reputation that has left some American citizens questioning its role in our country’s energy independence and some politicians looking for ways to reduce federal support. This includes the 51 cent blender’s credit (which will be reduced to 45 cents in 2009) and the 54 cent import tariff on foreign-produced ethanol.
Earlier in September during the Republican National Convention, the GOP voted to support John McCain’s opposition to government mandates and subsidies for the U.S. ethanol industry. In its 2008 policy platform, the GOP stated that the free market, not the government, should control how much ethanol is blended into gasoline. McCain has long opposed tax breaks for ethanol and the tariff that protects it from imports.
This is a strong move away from the Bush Administration’s support for the U.S. ethanol industry which calls to expand the use of ethanol to reduce dependence on foreign oil and increase revenues for farmers. As a part of the Renewable Fuels Standard (RFS), the U.S. will produce 36 billion barrels of ethanol per year by 2022.
In response to the GOP’s new stance, Democratic presidential nominee Barack Obama has reasserted his support of federal requirements to use ethanol as a way to reduce reliance on oil imports.
Both Democrats and Republications do support an increased push for developments in cellulosic technology to produce ethanol from non-food inputs rather than corn. This is ultimately where the future of renewable fuels is headed in a matter of years.
Some industry analysts believe that the removing ethanol mandates only make the transition to cellulosic ethanol more difficult. These analysts argue that the development and success of the cellulosic ethanol industry will be derived from the infrastructure created by the corn-based ethanol. It is their belief that eliminating federal support for renewable fuels will ultimately discourage investors and slow the necessary technological advances needed for cellulosic ethanol.
Still there are many business and political leaders that believe a free market will be a better way achieve the needed renewable fuel advancements without the current incentives and mandates from the U.S. government.
The debate on how the country should move forward with our renewable fuels initiatives will be a heated topic during the upcoming presidential election. As our country continues its quest to become more “green,” it will be interesting to see how the public reacts to upcoming ethanol policy debates. Will the country rally behind the ethanol industry or force it to stand on its own feet without assistance from the government?
Tags: Cellulosic · energy · Presidential Election · Renewable fuels · Republication National ConventionNo Comments
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