The United States will fall short of its federal mandate to blend 36 billion gallons per year of biofuels like ethanol into gasoline by 2022, the government’s top energy forecasting agency said Dec. 17.
The 36-billion-gallon target of blending motor fuel alternatives, such as traditional ethanol made from corn and next-generation cellulosic ethanol made from fast-growing grasses and trees, will, however, hit the level by 2030, the Energy Information Administration said in its annual long-term forecast. The EIA is the independent statistics arm of the U. S. Department of Energy.
The United States enacted the mandate, known as the Renewable Fuels Standard, late last year in an effort to provide jobs and begin to wean the country off foreign oil.
Since then, the collapse in oil prices and the credit crunch has hurt many biofuel companies. VeraSun Energy Corp., the largest publicly traded ethanol company, filed for bankruptcy protection in late October. Recently company lawyers said eight of VeraSun’s 16 plants were in “hot idle” mode, or ready to operate but not currently producing ethanol.
Meeting the mandate could provide Pres ident Barack Obama with challenges if he does not adjust policies. Obama has said he wants to boost the use of alternative motor fuels above the mandates. His choice for agriculture secretary, Tom Vilsack, the former governor of top ethanol-producing state Iowa, has recommended the phasing out of subsidies for corn-based ethanol and reducing tariffs on imports of Brazilian ethanol made from sugar cane.
For the moment U. S. ethanol capacity is too high, which is helping to make distilling ethanol barely profitable. U. S. capacity to make ethanol is slightly above the 2009 mandate for blending of 11.1 billion gallons of biofuels into gasoline.