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The federal government announced yesterday that they are pumping more money into the sagging ethanol industry.
Secretary of Agriculture Tom Vilsack, Environmental Protection Agency Administrator Lisa Jackson and Energy Secretary Steven Chu made the announcement during a conference call with reporters on Tuesday.
Vilsack said all three departments were instructed by President Obama to work in conjunction to create an opportunity for the bio-fuels industry to be an integral part of the American 21st Century clean economy.
Vilsack said his department would work on the necessary investments that need to be made into the infrastructure to move to advanced bio-fuels and to help corn based ethanol productions become more viable.
“This memorandum in my view reflects President Obama’s commitment to rural America,” Vilsack said. “It mergers and marries together rural economic development with agriculture to create clean jobs and create opportunity.”
Vilsack said the President gave the USDA a strict timeline to begin allocating funding to those who need it. He said the President has given the USDA 30 days to make funds available. He said $1.1 billion would be available.
Vilsack said a program created by the last farm bill would allow farmers to conduct audits of their own operations. He said those audits would help determine where land use should be focused.
“You will be looking at series of things that can be created in all parts of the county in order to get us to a point where we are more energy secure today and where we create the kind of jobs that can’t be outsourced – the kind of jobs that have to be created in rural Missouri,” Vilsack said. “We are essentially a financing mechanism for these changes.”
Vilsack said there would also be assistance provided to current operations that are struggling.
One aspect of producing ethanol is the cost factors involved in the environment. The EPA announced yesterday a new rules change proposal for cutting greenhouse gas emissions. Renewable fuels must cut emissions by 20 percent and advanced renewable fuels by 50 percent.
Jackson said the public and the industry would be involved in the process. The EPA is taking comments and will hold a public hearing on June 9 in Washington D.C. followed by a workshop.
Jackson said there are renewable fuels grandfathered into the rules.
“There are 15 billion gallons of ethanol grandfathered in under EISA and one would expect that is going to come from corn,” she said. “Corn-based ethanol is a bridge, and it’s an important bridge, but it is a bridge to the next generation of bio-fuels and ethanol.”
Opponents of ethanol say that ethanol production cannot meet the requirements the EPA has set. Jackson said there are ways to convert refineries into compliance. She said the research the EPA has conducted shows that it can be done.
“There are things now that can be done to make corn-based ethanol more sustainable as well,” she said. “You can look towards the future and realize that we’re moving to next generation fuel stocks. If you are beginning to invest in corn-based ethanol you can make that energy and greenhouse competitive as well.”
Chu announced his department would be supplying $786 million into the research and development of new technologies. Chu said research would focus on moving away from corn-based technologies into new ones.
“If you look at the great resources in the United States, certainly our agriculture resources are one of them,” Chu said. “We not only have an incredible capacity to grow the food we need, but to have a very dynamic export.
“The research will lead the way in giving us much better options in how to get sustainable bio-fuels as we transition away from corn – a good start, but certainly these advanced bio-fuels are going to be much appreciated,” he added.
Vilsack commended the EPA for working with the USDA and the DOE.
“I am pleased with the effort the EPA has taken to comply with the law and do it in a way in which they seek assistance and review in evaluations of the formulas,” Vilsack said.
“I think it’s a good sign that EPA is interested in listening. They want to get this right. They’ve worked really hard on this.”