Last week the USDA was touting the benefits of bio-based fuels. The department implemented a broad plan to encourage its agencies to begin using biodiesel and ethanol fuels in fleet vehicles. The move is part of White House national energy plan. Actual use by USDA vehicles is likely to amount to no more than the proverbial drop in the national fuel tank. Still the action is welcomed in farm country, where broadening the use of ample grain and oilseed supplies is important.
While the USDA policy is at least symbolically important, the mandate to use ethanol in the nation's most populous state promises to be a genuine boon to cornbelt refiners, if resistance can be overcome.
Ethanol demand for California is projected to reach between 600 and 900 million gallons per year. The need has sparked several entrepreneurs in the Midwest to "break ground" on ethanol plants. But California does not want any part of the grain-based fuel.
Officials with the California Environmental Protection Agency contend using ethanol would not only add pollution to the air, but also unreasonably increase the cost of fuel at the pump. Further, they contend that mainstream gas formulas will meet Clean Air Act parameters when burned by the current fleet of automobiles. With those arguments in hand, the State of California is suing the U.S. Environmental Protection Agency to overturn its recent ruling requiring gasoline sold in the Golden State to contain ethanol.
The basis for the conflict centers on the Federal mandate that parts of 18 states, and the District of Columbia, reduce air pollution levels. For the most part, this has been achieved by using fuel additives that create fewer pollutants when burned. The additive of choice was petroleum based Methyl Tertiary Butyl Ether, or M-T-B-E, but it was found to be a pollutant and has been banned by many states, including California. This opened the door for MTBE's renewable competitor ethanol. But recent studies have shown that while ethanol reduces carbon emissions it also increases levels of potentially lung-damaging oxides of nitrogen.
For their part, petroleum companies also have been making claims they can make a cleaner burning gas formula without additives while maintaining a competitive price.
If state officials can find a federal official to overturn the ruling, prospective ethanol makers will be left holding the bag.
Despite wrangling by all sides, the U.S. EPA maintains it can not grant California's request because the Clean Air Act does not give it the authority.