The US Energy Department recently assessed the economic feasibility of building an ethanol pipeline and found that the project would not be feasible due to current demand. For the pipeline's cost of $4.25 billion to be justified, it would need to ship 4.1 billion gallons per year to the East Coast. Currently, this region uses 2.8 billion gallons of ethanol per year. Government incentives like loan guarantees would also be necessary.
The Environmental Protection Agency (EPA) has not made a decision on whether it will raise the ethanol blend rate in gasoline from the current 10 percent to 15 percent. The auto industry is opposed to the higher ethanol blend rate, arguing that it would have adverse effects on its engines. Others are opposed to the higher rate and argue that food, such as corn, should not be used for fuel. Supporter, however, note that the higher rate will reduce greenhouse gas emissions.
The federal government announced a goal to increase the use of biofuels to 36 million gallons by 2022 and USDA recently released a roadmap for meeting this goal. To read the US Ag&Food Law and Policy Blog Post on this issue, click here. Meeting this goal, however, will require building new facilities that can convert a range of feedstocks such as woodchips, switchgrass, and other agricultural waste.
To read the Reuters story, click here.
Posted: 07/21/2010
