Obama Administration Announces Plan for Biofuel and Clean Coal

On the heels of his State of the Union announcement that the administration would push aggressively to drive clean energy innovation, President Barack Obama unveiled a three-part action plan to accelerate the development of biofuels and clean coal technology. The plan includes new rules concerning the national renewable fuel standard, incentives for biomass production and the creation of an interagency group to devise a federal strategy on carbon capture and storage. Clean coal and corn-based ethanol are at the center of the president's strategy, which is intended to create new jobs, diversify the country's energy portfolio and reduce dependence on foreign oil.

Among the more contentious of the action items is the Environments Protection Agency's (EPA) final set of rules for the national renewable fuel standard (RFS). The RFS provisions within the 2007 energy bill set a target for 36 billion gallons of renewable fuel to be consumed by 2022, including 21 billion gallons from advanced biofuels. Under the regulations set by the EPA in 2008, however, neither corn-based ethanol nor soy-based biodiesel met the carbon emission limits to qualify as renewable fuels. In fact, the original study found that greenhouse gas emission from ethanol production was equivalent or higher than petroleum production.

After a year of debate, the EPA revised its analysis, reducing the amount of emissions that could be attributed to biofuel production through indirect land use. The EPA now concedes that corn ethanol produced through energy-efficient processes can produce 20 percent less emissions than gasoline, though this would be calculated on a case-by-case basis under the new rules. Pro-ethanol groups continue to object to the use of indirect land use in calculations of emission levels, but the changes have found support within the industry.

The president also announced that USDA's Biomass Crop Assistance program, which began on an interim basis last summer, would become permanent. The program provides financial assistance to producers or entities that deliver eligible biomass material to designated biomass conversion facilities. Though the cost of the program was originally estimated at $70 million over five years, new administration estimates put the cost at $269 million this year and $479 million in FY11.

Finally, a presidential memorandum was issued to establish an Interagency Task Force on Carbon Capture and Storage. This group will have 180 days to release a comprehensive and coordinated federal strategy to speed the development and deployment of clean coal technologies. The plan is intended to help overcome the barriers to clean coal technology adoption within ten years and to bring five to ten commercial demonstration projects online by 2016.

An accompanying report, Growing America's Fuel: An Innovative Approach to Achieving the President's Biofuels Target, provides guidelines for federal agencies that can further support biofuel business and technology. Recommendations include coordinating efforts through the federal Biomass Board, expanding government use of biofuels, assigning lead agencies to oversee the development of industry segments, and targeted support of high-potential biofuel supply chain technologies.

Read the report at: http://www.whitehouse.gov/sites/default/files/rss_viewer/growing_americas_fuels.PDF.

Read President Obama's announcement at: http://www.whitehouse.gov/blog/2010/02/03/moving-america-s-clean-energy-economy-forward-boost-biofuels-clean-coal