In Alternative Energy Hunt, Ethanol Under the Gun
Ethanol and Washington: A Relationship on the Rocks
But all that worry about financing issues could become irrelevant should ethanol lose its political support.
After a decades-long courtship, the marriage between ethanol and Washington is teetering on an ugly divorce.
At the very least, the next administration, regardless of who wins in November, is certain to mount an aggressive campaign to find alternatives to corn ethanol. That would come primarily from cellulosic ethanol, which is produced from switchgrass, wheat, oat, barley and waste products. But to some extent, such ethanol faces the same criticism from those who oppose the idea of taking products out of the foodstream and converting them into liquid fuels.
The growing discontent over ethanol could well mean that nuclear energy will emerge as a stronger alternative, especially if Republican John McCain is elected.
"He really thinks corn-based is a fine alternative, but he doesn't think it should be singled out," says McCain senior policy advisor Douglas Holtz-Eakin. "He'd like to see a world where the alternatives are on a level playing field ... without this picking of a winner."
Democratic candidates Barack Obama and Hillary Rodham Clinton did not respond to repeated requests for comment.
Obama's Web site does not mention corn ethanol in his energy plans. He does pledge to meet the current RFS number and carry it to 60 billion gallons by 2030. But he mentions only cellulosic ethanol, and pledges "tax incentives, cash prizes and government contracts" to meet his biofuels goal.
Clinton's site also calls for a 60-billion-gallon RFS by 2030. Interestingly, her energy plan does not use the word "ethanol" at all, making reference only to "biofuels" without differentiating between corn or cellulosic ethanol.
Yet even in such a climate of political, economic and social turmoil, industry insiders are still hoping for a brighter future ahead, one that includes a balance between energy and food needs.
"As long as ethanol keeps going up, we're OK. It's not a great margin in this business, and we have seen marginal plants shut down," Pacific Ethanol's Kohler says. "We believe that there is very strong bipartisan support for the growth of a vibrant renewable fuels business in this country, given the conservation and environmental value that ethanol is bringing to the economy. We're not concerned that support will change."