Wednesday, July 16, 2008

Governors Talk of Moving Beyond Corn-Based Ethanol

"Move to phase two:" Governors in Philadelphia talk of moving beyond corn-based ethanol


Associated Press Writer, The Associated Press, PHILADELPHIA, July 13, 2008

Governors from the coal fields of West Virginia to the corn fields of Iowa talked Sunday at their summer meeting about moving beyond ethanol produced just from food sources.

They sometimes have different priorities in reaching this conclusion -- priorities that can be as simple as who grows corn and who feeds it to livestock.

And they're also not talking about replacement so much as supplementing: using switchgrass or wood waste products, for example, along with corn.

Still, the conversation -- including an energy forum Sunday -- has big implications. The nation has 134 ethanol plants in 26 states with 77 more under construction or expanding, according to the Renewable Fuels Association, a trade group for the ethanol industry.

This year's corn crop, expected to be a record, is worth about $52 billion.

Meanwhile, the Agriculture Department says economic growth in developing countries, tight global grain supplies and demand for ethanol have pushed corn prices to record or near-record prices.

That in turn has led some to blame the push for ethanol on high food prices. Disagreeing sharply, the ethanol industry and corn growers point the finger at record fuel prices driving up the cost of growing and shipping food.

"Corn-based and commodities-based ethanol for states like Minnesota has been a success story," said the state's governor, Tim Pawlenty.

"But we recognize that this has to now move to phase two," he said.

Pawlenty was among about half the nation's governors who gathered for the summer meeting, where clean and renewable energy is the top official topic.

Pawlenty, a Republican, launched "Securing a Clean Energy Future" when he took the reins of the National Governors Association last year as the group's chairman, a one-year post.

Texas Gov. Rick Perry raised the stakes in the debate in April when he asked the Environmental Protection Agency to cut by half a requirement in last year's energy law to produce 9 billion gallons of ethanol in 2008 for blending into gasoline.

Perry and other opponents of the requirement say the push to turn more corn into ethanol is raising food prices and the cost of feed for livestock.

The EPA hasn't acted on Perry's request and the Energy Department isn't thrilled about it, saying it would slow investment in biofuel technology.

Several Republican lawmakers -- but no other governors -- have signed onto Perry's request.
"I truly do not believe that a food-based product should be used for energy," said Gov. Joe Manchin of West Virginia, where almost all energy needs are met by coal. "It should be used for human consumption."

Gov. Mark Sanford of South Carolina called the EPA requirement "a totally bogus government mandate" at Sunday's energy forum.

The current buzz is cellulosic ethanol, or ethanol made from plant matter. Michigan Gov. Jennifer Granholm pitched the idea Sunday of using more wood products because of the large number of forests in her state.

Gov. Ed Rendell of Pennsylvania says his state "could be to cellulosic ethanol what Iowa was to corn-based ethanol." A new state law will require a minimum of a billion gallons of fuel annually pumped in Pennsylvania come from renewable fuels.

Iowa Gov. Chet Culver said he welcomed the debate as a way to reduce the country's dependence on foreign oil. But he said that "you can't get to cellulosic ethanol until you do ethanol first."

He pointed to the construction of a plant in Emmetsburg, Iowa, by ethanol maker Poet where the company hopes to produce cellulosic ethanol on a large scale.

"We should be thanking these Iowa farmers, these ethanol producers, these innovators, that are -- as we speak today -- out in Iowa trying to solve that energy security challenge," Culver said.

"No one believes that, long term, ethanol is going to be the silver bullet, but it is clearly one of the better options right now," he said.

Pawlenty says biofuels will be a big part of the nation's energy future but the type of biofuels will evolve and change Gov. Jon Huntsman of Utah echoed that notion when he dismissed the idea of an energy argument along the lines of to drill or not to drill for oil.

"The choices increasingly are plentiful," he said on C-SPAN Sunday.

"The question before policy makers really is what are the choices we have to get us from today's very hydrocarbon dependent world to one, 20, 30, 40 years from now, that will be much less hydrocarbon dependent," he said.

Copyright 2008 The Associated Press

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