Biofuels Exec Says Government Help Is On Its Way

ust when it looked as though the tide might be turning against biofuels, an executive at a major industry group has given a candid interview in which he reveals that the sector expects to get almost everything that it had wanted from Congress and more.

Brent Erickson, an executive vice president at the Biotechnology Industry Organization (or BIO,) bragged to Biofuels Digest that a Republican takeover of Congress wouldn’t hurt the industry’s chances at gaining further concessions from lawmakers. “You can look at biofuels as an agriculture policy issue—or as green tech,” said Erickson. “The oil companies will have more of a voice if the Republicans take over…but the Ag lobby is pretty powerful.”

The industry has been concerned about the impending expiration of ethanol producer and blender’s tax credits, which have combined to pump $17 billion into the industry since 2005. While those credits will likely be reduced or possibly eliminated, Erickson says that much of the funding is likely to continue in other forms. “What we are finding is that there is a preference in the House for an Investment Tax Credit as opposed to a Production Tax Credit. We expect to see the Congress renew the ethanol tax credit, but probably scaling it back.”

But whatever funding the ethanol and biofuels industry loses in tax credit reductions could be made back in the next farm bill—which Erickson says may be years away but is likely to contain “a big bioenergy title.”

With a combination of investment credits and the Renewable Fuels Standard—a mandate that has long served as a legislative backbone for the industry—the biofuels lobby seems confident that its product is far from on its way out. And as for the EPA’s long-awaited decision on upping the maximum allowable ethanol blend in gasoline to 15 percent, Erickson says he “wouldn’t be surprised to see E15” soon.

New Study Touts Improved Ethanol EfficiencyMeanwhile, ethanol supporters who have long been dogged by criticisms over the low energy yield of the fuel may have something to celebrate. A new report from the USDA says that the net energy balance (a measure of the ratio of energy that is required to make ethanol to the energy that it provides) has increased by 30 percent since 2004. Where 1 BTU of energy used to yield an average of 1.76 BTUs of ethanol power, it now produces 2.3 BTUs.

Unfortunately, this news is complicated by the fact that only fossil fuels were counted in the survey. That means it’s unclear whether the process itself has become more efficient or if manufacturers have simply found ways to divert energy use to electricity. Some producers have been installing biomass processors on-site, allowing them to generate some of the heat and electricity need for production without oil or natural gas.

While this should result in less emissions and should be counted as a mildly positive step in cutting down on oil use, ethanol still has a much lower net energy yield than gasoline—which has a ratio of about 5:1. Drivers who want to cut down on their carbon footprint, would still be much better served improving the overall fuel economy of their cars—by buying a hybrid or ultra-efficient gas-powered car—than trading in for new flex fuel-capable SUV.

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