Obama Doomed to Repeat Bush’s Ethanol Mistakes?

Cleantech types are optimistic that an Obama presidency will usher in a new era of hopeful politics and greener energy policies, but what would it mean for the floundering ethanol industry? Critics are already afraid that President-elect Obama will continue with Bush’s so-called failed ethanol policies, which many argue have led to higher food prices, an increasing number of bankrupt ethanol producers and more environmental ill than good.
Obama is in favor of maintaining the Renewable Fuels Standard (RFS) put in place by Bush’s Energy Independence and Security Act, which requires that biofuel production be increased to 15 billion gallons by 2015 from 6.5 billion last year, and to 36 billion gallons by 2022. Obama has proposed implementing a 60 billion-gallon requirement by 2030. States are already groaning under the current mandates and a consortium of governors had their call for relief from the RFS rejected by the EPA earlier this year.

Corn growers are an important constituency for Obama; he locked in the bulk of America’s corn-producing states, including his home state of Illinois, the nation’s second-largest corn producer, Iowa, Minnesota and Indiana. According to the USDA, more than two-thirds of America’s corn resides in states that voted blue on Tuesday.
However, Obama has acknowledged that corn ethanol is merely a bridge and has called for the acceleration of cellulosic ethanol development, laying out a goal of boosting production to 2 billion gallons by 2013. We’ve been keeping an eye on developing cellulosic ethanol plants, and while there’s no shortage of startups working on the problem, that scale of production is definitely ambitious. Obama has said he’ll support this growth with some of the $150 billion he has promised to invest in alternative energy.
Obama should reassess the transportation fuel situation before he continues pushing forward with his previously stated plan. Since the RFS was established, the ethanol industry has taken a major hit in both economic and PR terms. Meanwhile, electric vehicle development has sped up, with nearly every major automaker announcing plans for new all-electric models. Maybe Obama’s new energy and agricultural secretaries should take a gander at our ethanol deathwatch map before they get too excited about increasing our ethanol mandates.