Experts Urge Senators to Focus on New Biofuels Technology
Last week, energy experts told U.S. senators they should restructure renewable energy subsidies to focus less on corn-based ethanol and more on new, advanced technologies that could be used to produce biofuels from agricultural waste.
Speaking at a biofuels conference held by the Senate Energy and Natural Resources Committee, David Conover, director of the U.S. Climate Change Technology Program, said subsidies should be reserved for efficient biofuel technologies that need help entering the commercial market.
“We certainly don’t want to demonize corn ethanol, because it’s certainly better than gasoline,” Conover told the senators, referring to ethanol’s air quality and energy independence benefits. “But federal subsidies really ought to be targeted to…the valley of death.”
Cellulosic ethanol — a motor fuel that can be produced from biomass like wood chips, switchgrass and corn stover — is one of those ”valley of death” technologies, Conover said. Conover pointed out that cellulosic ethanol plants are expensive and can’t compete with corn ethanol. Thus, subsidies would help boost the technology, he said.
“You ought to consider directing the subsidies where they are needed the most,” Conover added, later noting that the corn ethanol industry is “very mature.”
Although the corn ethanol market is growing quickly, most experts say that there’s a limit to how much corn can be used for motor fuels before there’s a serious conflict between using corn for fuel and using it for food. Cellulosic ethanol, which uses inedible parts of crops, is seen as a the next step needed to further reduce the country’s dependence on foreign oil.
Conover argued that subsidies for corn ethanol should be pulled and instead put toward cutting edge technologies like cellulosic ethanol.
Reid Detchon, director of the Energy Future Coalition also suggested a need to rework ethanol subsidies.
“You have to assess what additional tax incentives are needed to help cellulosic ethanol in the near-term,” he told Dow Jones after speaking at the conference.
Subsidies for both fossil fuels and renewable fuels should be related to market prices, he said. “If oil is $70 (a barrel), probably neither industry needs support of any kind.”
Two critical ethanol subsidies expire in 2008 and 2010 and Detchon suggested that instead of simply renewing them, Congress should restructure them. Because market problems for corn ethanol could occur if oil prices drop, the new structure should include a sliding scale that ties subsidies to economic conditions, he said.