Illinois’ Democratic Sen. Barack Obama says that ethanol will have to be a commercially viable alternative to gasoline if it is to significantly reduce U.S. dependence on foreign oil in the long run.  The U.S. government, he added, is going to have to make substantial investments to make that happen.
 
Obama, like other lawmakers, wants to see a lot more cars in the U.S powered by E85, which provides only about two-thirds of the mileage that gasoline does (ethanol has less energy content).  Ethanol is now primarily used as an oxygenate additive in gasoline. Cars that run on E85 are relatively rare in the U.S., but Obama said he owns one.

President Bush called for a 35-billion-gallon per year ethanol production standard by 2017 in his State of the Union address.  Many grain and biofuel analysts agree, however, that the U.S., in order to meet the president’s ethanol standard, will have to produce ethanol from cellulosic sources: wood chips, corn stalks, certain vegetation, ect.
 
In an interview with Dow Jones Newswire, Obama said: “I don’t think we want to end up in a situation which we are producing tons of ethanol that are simply having to be subsidized to support the infrastructure that’s already there. We want to make sure that it actually supplements and ultimately helps to replace our dependence on  foreign oil.  And that is going to require an investment on the front end.”
 
The U.S. Department of Agriculture announced Wednesday its intention to fund $1.6 billion worth of research into improving renewable fuels, but didn’t provide details on what kind of research would be supported.
 
Congress has begun debating how to further support the ethanol industry as lawmakers begin work this year on a new multi-year farm bill that is expected to contain a strong energy title. The U.S. implemented a 51-cents-per-gallon federal Volumetric Ethanol Excise Tax Credit in January 2005 that will be in place through 2010. There is also a 54-cents-per-gallon U.S. tariff to discourage ethanol imports that expires at the end of 2007.
 
 

Yesterday, Agriculture Secretary Mike Johanns announced plans to propose $1.6 billion in new funding for renewable energy, with a focus on cellulosic energy research and production, as part of the Administration’s 2007 farm bill proposals.

This funding will support President Bush’s goal of reducing gasoline usage by 20 percent in the next ten years and will compliment an array of renewable energy-related efforts underway at the USDA.

USDA spent nearly $1.7 billion on energy-related programs between 2001 and 2005, and last year alone, USDA spent over $270 million on these programs in areas such as commercialization, research, infrastructure development, and technical support. Currently, there are 110 operational ethanol plants in 19 states with another 73 under construction and new proposals at an astounding rate.

USDA’s Agriculture Research Service (ARS) scientists have developed improved fermentation organisms and are making other significant steps toward achieving the technology needed for commercial production of cellulosic ethanol. ARS scientists have genetically modified a strain of lactic acid bacteria that produces increased levels of ethanol from cellulosic biomass. The research findings demonstrate that metabolic engineering has the potential to create new biocatalysts to convert biomass to biofuels.

Johanns plans to provide additional information about the proposal to provide $1.6 billion in new funding for renewable energy within the next few weeks when he unveils the Administration’s full package of 2007 farm bill proposals.