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President’s Emerging Energy Plan Renews the Renewable Fuel Debate

A taxpayer subsidy to agribusiness could morph into another American War of Independence. But here come the lobbyists.

by on May.12, 2009

A New Jersey political background will help Jackson dealing with the mob of lobbyists.

A New Jersey political past will help Jackson with the mob of lobbyists.

The U.S. Environmental Protection Agency is calling for a science-based review of the four renewable fuel categories that it announced earlier this month under its proposed Renewable Fuels Standard (RFS2). For the first time, some renewable fuels must achieve greenhouse gas emission reductions compared to the gasoline and diesel fuels they displace. Also for the first time, all transportation fuels are covered, not just gasoline. EPA wants to determine if using bio fuels really do decrease greenhouse gas emissions when an analysis is conducted over the entire life of the fuels.

A political struggle is developing with corn-based ethanol producers and soy-based biomass diesel producers whose fuels likely will not meet the proposed tests. EPA has proposed some sort of grandfathering for existing production plants, but has limited the output to existing levels.

From an economic point of view, the current taxpayer subsidies for ethanol make no sense. Now the real possibility exists that some renewable fuels are unhealthy too. For producers and investors in these fuels, billions of dollars are at stake. A public hearing on June 9th will no doubt be lively.

The health issue is only the latest twist in the tortured road the EPA has been on over fuel economy and global warming standards. After a “thorough scientific review” ordered in 2007 by the U.S. Supreme Court, EPA issued a proposed finding in April that said greenhouse gases contribute to air pollution and may endanger public health or welfare. It is now moving ahead in several areas that will affect not only your future driving but the use of any machine that uses fuel.

The proposed RFS2 thresholds for the new fuel categories would be 20% less greenhouse gas emissions for renewable fuels produced from new facilities, 50% less for biomass-based diesel and advanced biofuels, and 60% less for cellulosic biofuels.    (more…)