Texas Congressman Pete Olson has introduced legislation to classify ethanol made from coal and natural gas as a renewable fuel. The bill has three Democratic and two Republican co-sponsors.
The largest ethanol producers in the US are Archer Daniels Midland Co. (NYSE: ADM), Valero Energy Corp. (NYSE: VLO), and privately held POET.
Ethanol in the US is virtually all made from corn, but as the Renewable Fuels Standard’s requirements for ethanol rise, the portion of the US corn crop used to manufacture ethanol is sure to rise from the current 40%, increasing the price of corn to ranchers and farmers who use corn as livestock feed.
The Renewable Fuels Association, an ethanol lobbying group, is not amused:
There is nothing renewable about fossil fuels and they have no place in national renewable energy policy.
The US Renewable Fuel Standard calls for 13.2 billion gallons of ethanol in 2012, rising to 36 billion gallons in 2022. By that year, 22 billion gallons of ethanol are required to come from sources other than corn. Ethanol from cellulose was supposed to fill the requirement, but progress toward scaling cellulosic ethanol production has been slow.
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