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Environmental

Ethanol industry questions EPA lifecycle GHG emissions analysis

Using the classic Executive Branch backdoor/end-run around an agency [a common practice in all of the last Administrations stretching back to the 1970s], the ethanol industry has met with OMB to raise questions about EPA's proposed lifecycle emissions analysis of ethanol production and other biofuels. EPA is performing such analyses as part of a forthcoming rulemaking on renewable fuels. The attendees at the meeting can be found at http://www.whitehouse.gov/omb/oira/2000/meetings/790.html. As noted in prior posts, the Energy Independence and Security Act (PL No. 110-140) requires the U.S. fuel supply to include 36 billion gallons of ethanol or other biofuels by 2022. The standard for 2008 is 9 billion gallons. As also noted in prior posts, DOE and USDA have issued an action plan for moving away from food crops to produce ethanol in the future. Apparently the industry is concerned that too much weight is being given by EPA to studies that say that shifting land in the U.S. from food production to biofuels production would increase pressure to clearcut forests in tropical countries in order to create agricultural land to grow more food crops. See, for example, http://www.gmfus.org/publications/article.cfm?id=385. The results of such assumptions are that the so-called GHG emission benefits of ethanol disappear if the "indirect" land-use effects are taken into account. The industry notes that any such projections are full of uncertainties and questionable assumptions. As noted in prior posts, the U.S. ethanol industry is facing tough economic times. An article in today’s N.Y. Times offers further evidence of the industry's financial difficulties. See http://www.nytimes.com/2008/11/05/business/05ethanol.html?_r=1&scp=2&sq=ethanol&st=cse&oref=slogin. The article notes that one of the largest producers just filed bankruptcy (having bet incorrectly on the price of corn); two other major producers have recently lost 80% of their value. Other firms have also suffered by betting incorrectly on corn prices.