WASHINGTON, Feb. 26 (UPI) -- Amid rising corn prices affecting the margins of livestock farmers, the Bush administration has renewed its call for cellulosic materials to eventually take the place of corn as the main source of ethanol.
"The problem is we got a lot of hog growers around the United States and a lot of them here in North Carolina who are beginning to feel the pinch as a result of high corn prices," Bush said Thursday during a visit to Franklinton, N.C.-based enzyme firm Novozymes. "A lot of the cattle people around the United States ... they're worried about high corn prices affecting their making a livelihood. ... And so the question then is how do you achieve your goal of less dependence on oil without breaking your hog raisers?
"And here's how: You develop new technologies that will enable you to make ethanol from wood chips, or stalk grass, or agricultural waste."
As part of its efforts to reduce U.S. dependence on imported oil the Bush administration has set a goal of reducing gasoline usage by 20 percent over a 10-year period. More than 45 percent of gasoline sold in the United States is 10 percent blended with ethanol, and there are growing calls for that proportion to increase to 85 percent.
The United States consumes some 7 billion gallons of ethanol a year made from corn. More ethanol means, at least for now, more corn, which will be needed to offset some of the mandates set by the federal government: 35 billion gallons of renewable fuels by 2017. This rising demand has made corn a red-hot commodity and pushed up prices. Corn farmers, who are getting record prices for their yield, are happy. Those who use corn, mainly as a feedstock, are not. The demand for corn is increasing, and consequently farmers are considering planting it in fields where they would normally grow soybeans.
Indeed, 10 years ago less than 5 percent of corn production was used to manufacture ethanol. In 2005 it was 14 percent. In 2006 it touched an estimated 20 percent, or more than 2 billion bushels, nearly the same as the amount of corn exported each year.
It is hoped that ethanol from cellulosic sources such as biomass and switchgrass can help reduce some of the dependence on corn. The problem: costs, though there have been some developments, including a drastic reduction in the cost of ethanol from cellulosic sources.
"What we have been able to do since 2000 until we reported it in 2005, on a grant provided to us from Department of Energy, is to reduce the cost of conversion by a factor of 30," Thomas Nagy, president of Novozymes North America, said during Bush's visit.
Kevin Wenger, head of research for the company, called Bush's goals of reducing gasoline consumption by 20 percent in 10 years "very achievable," noting the strides that have been made in the ethanol sector.
"If you look at what's happening now, what's been happening with corn ethanol over the last five years and the developments that are coming in terms of implementation of cellulosic, it's really amazing," he said. "Things are really starting to happen.
Indeed, in its fiscal year 2008 budget the Bush administration committed $179 million for research into producing ethanol from a variety of sources in a bid to make cellulosic ethanol cost-competitive by 2012.
The $24.3 billion budget for the Energy Department also requested $2.7 billion for the Advanced Energy Initiative, which promotes renewable energy technologies such as biomass. Separately, the Office of Energy Efficiency and Renewable Energy gets $1.24 billion, including a funding increase for biomass. Biomass also gets $113 million out of the $713 million requested for Science Programs.
Questions remain, however, on how far along cellulosic ethanol is to match many of the expectations placed upon it. Last year the Energy Information Administration, the U.S. Department of Energy's data arm, said ethanol production from cellulose would reach 300 million gallons by 2030, slightly higher than the 250 million gallons per year required starting in 2013 by the Renewable Fuels Standard in the 2005 Energy Policy Act.
Supporters of cellulosic contend, however, that those estimates are too low.
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