US ethanol producers urge Obama to up ethanol content of motor fuels

• Wesley Clark says move would create American jobs• Lobbyists want corn-based fuel content to increase to 15%

Suzanne Goldenberg, US environment correspondent
guardian.co.uk, Friday 6 March 2009 18.28 GMT

America's ethanol producers, who have been hit hard by the economic recession, today urged the Obama administration to raise the ethanol content in blended motor fuels to 15%.Wesley Clark, a former Nato commander and Democratic presidential candidate who now lobbies for the ethanol industry, said the move to use more of the corn-based fuel would help America create jobs at home and cut back on the use of imported fuel.
"This is about jobs, energy security for America, improving the environment and meeting our legal responsibilities," Clark, the chairman of Growth Energy, a coalition of ethanol firms, said in a statement.
Growth Energy filed a formal request with the Environmental Protection Agency asking for the limit on ethanol in motor fuel be raised from the existing 10% ceiling to 15%.
The industry, despite years of subsidies by the US government, has been suffering in recent months, with falling prices and production because of the economic downturn. VeraSun, one of the country's largest producers, filed for bankruptcy after losing hundreds of millions of dollars in the corn market.
The entire ethanol industry is also facing increased scrutiny – both for its claim to be a greener alternative to fossil fuels and for its effect on food prices. Recent studies have raised doubts about whether a switch from petrol to corn ethanol significantly reduces greenhouse gas emissions. The increased demand for ethanol, which saw more farmers growing corn for fuel, was also blamed as a factor in last year's soaring food prices.On Friday, the organisation argued that without the increase in the ceiling it could be difficult to meet targets set by Congress for increasing the use of renewable fuels. It also said that the cap would block the emergence of newer forms of ethanol which are made from grasses and sugarcane, rather than corn.
Congress has directed refineries to increase their uptake of ethanol to 36bn gallons a year by 2022. Under the current 10% ceiling, the ethanol industry is supposed to supply 14bn gallons of the fuel.
Obama has said that he would support pushing the target much higher, up to 60bn gallons a year. The energy secretary, Steven Chu, has also said that he would support raising the ethanol ceiling - perhaps to 12% - so long as the auto industry offers assurances about what effect the higher concentration would have on cars.
Clark, citing a study by North Dakota State University, in his statement argued that the 5% increase in ethanol would put $24.4bn into the economy. "These figures are dramatic and prove that we can create desperately needed jobs in the midst of difficult economic times with a relatively simple step," he said. "By increasing the amount of ethanol blend into our current gasoline supply, we can create thousands of new American jobs that can not be outsourced, support rural communites and farmers, reduce greenhouse gas emissions and ensure the market for cellulosic ethanol."