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Non-Tech : $2 or higher gas - Can ethanol make a comeback? -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (282)	5/26/2005 12:11:54 AM
From: richardred	Read Replies (1) \| Respond to of 2801

^Senate committee adopts standard to double ethanol use< By Bill Lambrecht St. Louis Post-Dispatch (KRT) - WASHINGTON - Midwestern farmers scored a significant victory Wednesday when a Senate committee adopted a national new fuel requirement that would more than double the use of ethanol over the next seven years. Up to now, the government has promoted ethanol mainly with subsidies. The proposal adopted by the Senate Energy Committee would establish a federal requirement that refiners use at least 8 billion gallons of renewable fuels – made mostly from corn_in the nation's gasoline by 2012. The so-called renewable fuel standard must survive aggressive efforts by the oil industry, which hired politically connected lobbyists recently in hopes of scaling back the mandate. Nonetheless, the committee action strongly suggests that a new ethanol requirement at some level will be part of a national energy bill for the first time. "It is a huge deal," said Sen. Jim Talent, R-Mo., who sponsored the amendment. "We have a long way to go to decide whether it is 8 billion gallons or 6 billion gallons or somewhere in between. But we are increasingly going to be using in our engines what we grow instead of what we drill. And the benefits are going to be enormous." The Senate is expected to take up the energy bill next month. A House-passed version includes a fuel standard of 5 billion gallons, leading many participants in the debate to conclude that the size of the mandate will be settled when Senate and House members meet later to iron out differences. The passage of Talent's amendment by voice vote rather than a roll call reflects broadened support for ethanol that stems in part from soaring fuel prices in recent months. Ethanol fights in Congress in the past have been regional disputes pitting the farm-rich Midwest and Great Plains states against the rest of the country. Members of Congress from Texas and the Gulf Coast, oil-producing states have been the most hostile to government subsidies aimed at building an ethanol industry. But recently, some of the coastal opposition has dissipated as farmers outside of the Midwest see the potential of making ethanol from crops such as soybeans, sugar and potentially trees, grasses and even animal wastes. Ethanol supporters also have blunted opposition by pointing to ethanol industry successes in Brazil and Europe and by stressing the need to reduce oil imports. The 8 billion-gallon requirement adopted Wednesday would translate to an annual reduction of 2 billion barrels of crude oil by 2012, they contended. "We are held hostage by oil coming from troubled parts of the world," said Sen. Byron Dorgan, R-N.D, a co-sponsor of the measure with Talent. But Sen. Diane Feinstein, D-Calif., said the reductions in oil imports would amount to less than 1 percent when figuring in energy costs to make ethanol. Citing a government study conducted when oil prices were lower, she argued that the ethanol mandate would add nearly 2.4 cents a gallon to the price of gasoline. Feinstein also pointed to studies conducted in California showing that ethanol worsens smog, particularly on hot days. She won passage of an amendment giving California a partial waiver to the ethanol requirements in summer months in order to meet clean air requirements. The oil industry has stepped up an effort to curb ethanol's growth, warning that refiners would find it difficult to meet the 8 billion-gallon mandate. A recent study sponsored by the American Petroleum Institute asserted that the ethanol requirement would cost consumers billions of dollars, partly in higher costs of food when crops are grown for fuel. Petroleum Institute spokesman Marc Meteyer said, "The practical aspects of serving the customer have been set aside in the euphoria over higher and higher mandates for ethanol. There are real world issues that have to be dealt with." Congress Daily, a Washington newsletter, reported Wednesday that the institute had hired the lobbying firm of Quinn Gillespie & Associates to make its case against the ethanol mandate. Partners include Ed Gillespie, who was Republican Party national chairman for two years through the 2004 elections, and Jack Quinn, a Democratic operative who was a lawyer in the Clinton White House. Meteyer declined to comment specifically on the lobbying arrangement. "It takes a lot of effort to get our voice heard in Congress," he said. --- © 2005, St. Louis Post-Dispatch. kansascity.com