EPA emissions rules could hinder ethanol

Washington, D.C. - Biofuels producers don't like to think of themselves as a cause of global warming, but that's how they could be regulated under the Obama administration's regulations on greenhouse gases.

The regulations, due to take effect in January, would count as greenhouse gases the carbon dioxide that's released when corn is fermented into motor fuel or when corn stalks, straw and other sources of biomass are burned to make electricity.

That means a paperwork and financial burden for most of the state's 39 ethanol plants. The regulations won't require polluters to reduce greenhouse gas emissions but could in the future.

The ethanol industry is appealing to the Environmental Protection Agency to reconsider how it counts biofuel emissions.

A typical Iowa ethanol plant would release about 300,000 tons of greenhouse gases a year - if the emissions from fermentation are included - three times the 100,000-ton level that triggers the agency regulations, according to the Iowa Department of Natural Resources. The DNR estimate includes greenhouse gas emissions from the coal or natural gas used to run the plant.

The rules won't mean much for the 15 ethanol plants in Iowa that already file reports and pay fees under the federal Clean Air Act because of other pollutants such as nitrogen oxide that they emit.

What the greenhouse-gas regulations will do is sweep the rest of the state's plants under the Clean Air Act, and require them to start filing reports on emissions and paying fees on their pollutants as well, said Marnie Stein of the DNR's Air Quality Bureau.

The fees would likely average $5,600 to $11,200 a year, she said.

"Those fees could be quite costly for some ethanol plants," said Geoff Cooper, who follows regulatory issues for the Renewable Fuels Association, a Washington trade group.

No one questions that fermenting corn or burning biomass for electricity puts carbon dioxide into the atmosphere.

But most greenhouse gas calculations, including those of the United Nations' climate panel, don't include such emissions, known as biogenic, because they come from biological sources.

The reason: The carbon released from corn or biomass will eventually be returned to earth as crops and other biomass sources are replanted. Plants take carbon dioxide out of the air as they grow.

Coal, on the other hand, is dug from the earth and never replaced, so its carbon is lost into the atmosphere when the coal is burned.

In a bit of irony, some analysts believe the rules could actually discourage ethanol plants from cutting their use of fossil fuels.

Here's how: The environmental agency is expected to eventually go beyond demanding paperwork and fees from greenhouse-gas sources and start requiring them to reduce emissions.

An easy way for ethanol producers to do that would be to stop running their plants with coal or natural gas and instead burn corn stalks and other sources of biomass. But that won't work if the agency continues to count emissions from burning biomass as greenhouse gases, said Nathaniel Baer, who follows energy policy for the Iowa Environmental Council.

"If the biomass is considered carbon neutral, then it seems like it would create a viable compliance option down the road for reducing emissions" from ethanol plants, Baer said.

The environmental agency announced this summer that it was taking a second look at the emissions issue and asked for industry and public comment.

In the meantime, the DNR is taking steps to implement the regulations in Iowa and has no choice but to mirror what the environmental agency does, Stein said. If the state tried to exempt the emissions from corn fermentation, as the ethanol industry wants, the agency would under federal law override the state rules, she said.

If the agency reverses itself on ethanol and biomass emissions, the state will follow suit later, she said.

The Renewable Fuels Association wants the state to exempt the emissions now without waiting on the environmental agency, noting that even if the agency doesn't change its rules they could be struck down by the courts.

Not all producers are worried about the regulations.

Green Plains Renewable Energy is experimenting at its Shenandoah plant with reducing its carbon dioxide emissions by using the gas to grow algae that could be used for fuel or feed. Green Plains hopes to eventually offer the technology to ethanol plants and other companies that want to reduce carbon dioxide emissions, a spokesman said.

source: desmoinesregister