Des Moines Register, IA
01-24-07
Emphasis on ethanol stands out
Energy: Bush plan calls for 20% reduction in gasoline usage within 10 years
War in Iraq: President makes case for his strategy, says 'America must not fail
By PHILIP BRASHER
REGISTER WASHINGTON BUREAU
Washington, D.C. - President Bush proposed Tuesday to require motorists to use
35 billion gallons of ethanol and other alternative fuels by 2017, a move that
could have a far-reaching effect on agriculture and Iowa's economy.
That is nearly seven times the amount of ethanol distilled from corn last year.
Some of the additional ethanol would come from increasing corn acreage in Iowa
and elsewhere. But the rest would have to come from sources of plant cellulose,
inedible material such as crop residue, perennial grasses and wood chips.
"It is in our vital interest to diversify America's energy supply, and the way
forward is through technology," Bush said in his State of the Union message.
The 35 billion-gallon mandate is nearly five times the amount of ethanol that
refiners are required to use by 2012 under current law.
The president was interrupted by applause several times as he talked about his
energy plan, and he received a standing ovation from Congress when he called
for reducing gasoline use by 20 percent. TV cameras caught Sen. Charles
Grassley, R-Ia., beaming after the president outlined his plan.
Bush said the reduction in gasoline usage he proposed would save the
equivalent three-quarters of projected oil imports from the Middle East.
It is a "very ambitious goal, but we think it's achievable," said Joel Kaplan, the
White House's deputy chief of staff for policy.
Iowa, already the leading producer of ethanol, is taking a leading role in efforts to
make the fuel from plant cellulose or biomass. A $200 million project at
Emmetsburg would process cobs and other corn residue into ethanol.
Researchers at Iowa State University have worked with the federal government
on analyzing the availability of feedstocks and developing methods of harvesting
and storing the biomass.
But Bush's mandate leaves significant questions to be answered, said Robert
Brown, director of Iowa State's biorenewables program.
"I don't know how we're going to do it," Brown said.
Among the questions: The types of fuels that should be made and how, the high
costs of building the biorefineries, and the availability of feedstocks such as crop
residues. About 15 billion gallons of ethanol can be made from corn without
significantly disrupting food markets, experts say.
Ethanol's rapid growth is already having major impacts on agriculture. The
demand for corn is pushing up grain prices to 10-year highs and breaking
records for land prices and rents in Iowa. Pork producers are complaining that
the high prices will wipe out their profits.
In last year's State of the Union address, Bush brought public attention to
cellulosic ethanol for the first time, boosting investment and research in the
industry. Tuesday's speech is expected to generate new funding to develop the
next wave of ethanol.
Under Bush's new proposal, other fuels also would be eligible for the mandate,
including two other types of alcohol - methanol and butanol - and biodiesel and
hydrogen. A 35 billion-gallon mandate would displace 15 percent of projected
annual gasoline use in 2017.
"The president is going beyond vague plans in the indeterminate future, and he's
sticking to one of those business school propositions, which is that nothing gets
done without a deadline," said Kevin Book, an ethanol industry analyst with
Friedman, Billings, Ramsey & Co., an Arlington, Va.-based investment firm.
Kaplan said the White House would ask for additional funding for research and
development in its 2008 budget, to be released Feb. 5. He also said support for
cellulosic ethanol would be a "very significant part" of the new farm bill that
Congress is to write this year.
Bush also proposed to increase fuel-economy standards to save 8.5 billion
gallons of gasoline by 2017. That would displace another 5 percent in projected
gasoline usage.
Together, the alternative fuels mandate and higher efficiency standards would
stop the projected growth of greenhouse gas emissions within the 10 years, the
White House said.
Tad Patzek, an engineer at the University of California at Berkeley who is a
leading critic of the ethanol industry, said the nation will never produce the
amount of fuel Bush wants because of technology issues, land availability and
other obstacles. Instead, "our politicians need to start talking about cutting energy
use by a factor of two," he said.