January 25, 2007

 

Bush's call for more ethanol energises fuel, farm sectors

 

 

President George W. Bush's call on Congress Tuesday (Jan 23) to mandate a sharp increase in ethanol production has energised the renewable fuel industry representatives and some farm groups, although some in the feed-dependent livestock sector voiced concerns.

 

Bush's call for a 35-billion-gallon ethanol production standard by 2017--seven times the US capacity of 5 billion gallons in 2006--is achievable and necessary, Renewable Fuels Association President Bob Dinneen said Wednesday in a teleconference with reporters.

 

Mark Maslyn, executive director for public policy with the American Farm Bureau Federation, called Bush's speech very positive and predicted it will raise the profile of farm-based energy and "set an ambitious goal for this country".

 

Farmers, Maslyn told Dow Jones Newswires, are excited to play a part in reducing US dependence on foreign oil.

 

"The US ethanol industry stands behind President Bush and this Congress in their commitment to taking the bold steps necessary to realise the full potential of American agriculture and this industry," Dineen said.

 

Corn-based ethanol is the primary renewable fuel produced in the US now, but soybean-based biodiesel received mention by President Bush in his State of the Union Address this year to the delight of farm and industry groups.

 

American Soybean Association (ASA) Chairman Bob Metz predicted Bush's goal "will benefit soybean growers by creating long-term demand for biodiesel made from soyoil".

 

"ASA looks forward to working with both parties to pass pro-biodiesel legislation, such as the biodiesel tax incentive, and a greater role for biodiesel in the (renewable fuel standard)," Metz said in a statement.

 

Biodiesel production rose to 75 million gallons in 2005 from 25 million gallons in 2004, according to the National Biodiesel Board.

 

"For a long time farmers have been advocating for a greater use of renewable energy," National Farmers Union President Tom Buis said in a statement. "It is nice to see President Bush promoting policy we have long supported, increasing the use of fuels from the farm and decreasing our reliance on foreign oil."

 

But corn-based ethanol still represents the bulk of renewable fuel production and some farm representatives expressed concern over a new push while corn prices are expected to remain high and the technology has not yet been developed to make cellulose-based ethanol commercially viable.

 

Corn is a primary feed ingredient for swine producers, and the National Pork Producers Council (NPPC) is concerned about production costs.

 

The group supports Bush's energy goals, NPPC President Joy Philippi said, but stressed that "the pork industry has concerns about the rapid growth in the renewable sector, including increased feed input costs, the availability of corn, the ability to use ethanol by-products and the time it will take for feed grain markets to stabilise."

 

Maslyn added, "We need to be mindful and concerned about the impact on the livestock sector."

 

The ethanol industry is already booming in the US, sharply boosting corn demand and the pressure is on farmers to produce more.