Senator: Ailing Ethanol Industry Needs Help

Senator Jeff Bingaman, a New Mexico Democrat and chairman of the Senate Energy and Natural Resources Committee, said adding more ethanol to current fuel blends may be in order.

When Congress passed the 2007 energy bill a little more than a year ago, it was supposed to herald a new golden age for ethanol production.

But like all alternative energy, the ethanol industry finds itself in a rough patch, as I report in Thursday’s New York Times.

Senator Jeff Bingaman, the powerful chairman of the Senate Energy and Natural Resources Committee and a New Mexico Democrat, says Congress may need to help more.

Corn ethanol plants are closing almost every week, and many technological hurdles remain before advanced biofuels made from cellulosic materials like wood and sugar wastes can be become commercial. Private investment money is drying up.

It was not supposed to be that way when Congress mandated a doubling of corn ethanol use to 15 billion gallons a year by 2015 and the use of an additional 21 billion gallons of ethanol and other biofuels produced from materials collectively known as biomass. Now the 2010 target for cellulosic ethanol of 100 million gallons produced appears virtually impossible to meet.

“Obviously the ethanol industry is in some difficulty now,” Senator Bingaman said in an interview. Mr. Bingaman said he sympathized with the industry’s desire for more loan guarantees and said he thought government regulations that limit ethanol content to 10 percent of most gasoline blends should be reconsidered.

“I believe we could go to E-12, or E-14 or E-16 without causing any great problems with vehicle operation,” he said.


The E.P.A. and the Energy Department are currently conducting tests to see if higher blends would be good for the environment without hurting car performance — as many drivers suspect. Senator Bingaman said he thought results would be out within a year or so.

More ethanol in blended gasoline is a high priority for the ethanol industry because gasoline consumption is declining due to the weak economy. With the current blend limitations, ethanol executives are concerned that too much ethanol will be produced for the market and there will be no room for the advanced biofuels.

“There is no doubt when we wrote that bill in 2002 we did not anticipate the recession we are currently sinking into,” Senator Bingaman said. “Exactly what that requires us to do as far as changing the law I am not clear on yet. It’s possible we will have to look at the targets again.’’

The new Obama administration has not pronounced a specific ethanol policy yet. But an administration official released the following statement at the end of last month:

“We recognize that the biofuels industry – like so many other industries – is struggling under a faltering economy. We are working with Congress and assessing ways to help the industry as a whole in the stimulus package, as investing in advanced biofuels is important to the President’s broader goals of reducing dependence on foreign oil and growing rural economies.”