USDA Says Biofuel Production Will Continue to Rise

U.S. biofuels production – primarily ethanol and biodiesel – will continue to increase over the next decade, but at a slower rate than in the previous 10 years, USDA reported this week. Meanwhile, ethanol production continues to be the target of legislation. Sens. Jeff Flake (R, AZ) and David Vitter (R, LA) introduced legislation dubbed the “Phantom Fuel Reform Act,” a bill that would change the federal Renewable Fuel Standard on cellulosic ethanol to reflect the fact there is almost no commercial production of the fuel. A similar bill was introduced in the House by Reps. Gregg Harper (R, MS) and Jim Matheson (R, UT).

Meanwhile, Sen. Roger Wicker (R, MS) said he’ll introduce the first Senate bill to reverse EPA’s allowance of 15% blends of ethanol and gasoline, so-called “E15.” The bill would freeze the blend rate at 10% and prohibit EPA from raising it to 15%, action that, if successful, would nullify the agency’s action last year to permit E15 for use as a fuel blend in cars made after 2001. Similar legislation was introduced in the last Congress by Rep. Jim Sensenbrenner (R, WI). On biofuels production, USDA reported that in 2004-2005, corn used for ethanol totaled 1.323 billion bushels, or about 11% of 2004 corn production; by 2011-2012, corn used for ethanol totaled 5.011 billion bushels, or about 40% of the 2011 corn crop, USDA said. For 2012-2013, USDA sees corn for ethanol use dropping to 4.5 billion bushels, but still consuming 42% of the drought-reduced corn crop. Biofuel production will steadily increase in the future, but likely not exceed 2011-2012 production until 2020-2021.