A measure was reintroduced last week in the House with bipartisan support to allow ethanol produced from U.S. natural gas to be included under the Renewable Fuel Standard (RFS). Whether the bill finds traction, which one failed to do last year (HR 3773), remains open to question.
Reps. Pete Olson (R-TX) and Jim Costa (D-CA) introduced the Domestic Alternative Fuels Act (HR 1959) to include ethanol. Only corn-based ethanol currently meets the RFS standard. The legislators argue that the RFS was “designed to reduce our need for imported oil, but the unintended consequences have resulted in escalated food and feedstock prices by diverting food crops to ethanol production.”
Co-sponsors include nine House members from Texas: Republicans Ted Poe, Ralph Hall, Blake Fahrenthold, Bill Flores, Joe Barton and Randy Neugebauer; and Democrats Henry Cuellar, Gene Green and Filemon Vela. Also co-sponsoring the legislation are Reps. Eric “Rick” Crawford (R-AR), Tom Cole (R-OK), Tim Griffin (R-AR), Kurt Schrader (D-OR), Peter Welch (D-VT) and Thomas Marino (R-PA).
“The RFS’ singular focus on corn ethanol translates into higher food costs for working families, as well as higher feed costs for livestock producers. To be clear, my primary goal will always be the full repeal of the market distorting RFS,” Olson said. “However, until then, we can take care of immediate problems by providing greater participation and competition under the program. Expanding the sources for ethanol will only benefit all Americans.”
The legislation notes that the artificial market created by the RFS mandate will require 36 billion gallons of ethanol in less than 10 years — quadruple the initial 2008 mandate. An estimated 40% of the U.S. corn crop was used for ethanol production in recent years, resulting in diminished supplies for livestock and food producers and higher corn prices, Olson and Costa claim.
“We cannot keep gambling our nation’s energy and food security on a broken policy. The Renewable Fuel Standard has injected uncertainty into our economy, and it’s time to bring this policy back into balance,” said Costa. “Our bill will help stabilize feed prices and create some sanity in this policy through diversifying sources for ethanol production. American families and farmers cannot continue to pay for Washington’s unwillingness to reform the RFS.”
Olson and Costa add that the bill would also enhance America’s energy security and global competitiveness by expanding the eligibility requirements within the RFS to allow ethanol derived from natural gas to compete with corn-based ethanol. Broadening the number of feedstocks eligible within the RFS “will enable greater capital investment in research and development” and “promote the construction of new domestic production facilities, creating American jobs.”
At least three U.S. companies have advanced technology for using natural gas as the base for ethanol, including Dallas-based Celanese Corp., Warrenville, IL-based Coskata Inc. and Hillsborough, NJ-based Primus Green. Coskata’s website indicates that the company has been “successfully producing fuels and chemicals from natural gas for the last five years including operations at our pilot facility in Warrenville, and at our commercial demonstration plant in Madison, PA.” Separately, Celanese has maintained that it can create “drop-in fuel” at a cost of about $1.50/gallon by putting hydrocarbons through a thermochemical process that results in ethanol.
Advocates have suggested limiting the amount of gas-based ethanol by only issuing a limited number of licenses. The Renewable Fuels Association has rejected attempts to change the RFS to benefit the oil and gas industry. In response to a previous legislative proposal earlier this year, the RFS Reform Act, the association last month said the backers “want a ‘free market’ for energy, but they do nothing to end the billions in subsidies to Big Oil, and they deny market access to [ethanol].”
Groups in support of the Domestic Alternative Fuels Act include the National Cattlemen’s Beef Association, National Chicken Council and America’s Natural Gas Alliance.
©Copyright 2013Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 2577-9877 | ISSN © 1532-1266 |