US Farm, Food Groups, Oil Cos File Lawsuit Over EPA Ethanol Decision(Source: CME)
Meat producers, restaurant chains and oil companies are all challenging the U.S. Environmental Protection Agency's decision to increase the amount of ethanol that can be blended into gasoline. In two separate lawsuits filed, the groups say EPA acted illegally when it made a controversial decision in October to increase ethanol levels in gasoline from 10% to 15%. The EPA was not available for comment.
One lawsuit--filed by the Grocery Manufacturers Association, the American Meat Institute and the National Council of Chain Restaurants, among others--said the EPA can't allow higher levels of ethanol for new cars, while continuing to study its effect on older vehicles. Granting a "partial waiver," the EPA allowed higher ethanol levels for model-year 2007 cars and newer and said it would consider raising levels for older cars in coming weeks.
The meat producers, grocers and restaurants also contend that increasing the use of ethanol in cars will increase corn prices and make food more expensive. A second lawsuit, filed by the American Petroleum Institute, challenges the EPA's statutory authority. In a statement released Tuesday, the petroleum group said the EPA should have waited to rule on the issue until certain tests had been completed. "Results so far have revealed potential safety and performance problems that could affect consumers and the investments they've made in thier automobiles," said Bob Greco, API's director of downstream operations.
Biofuels Could Be Bonanza For Marginal Farmland In Southeast US(Source: CME)
Marginal farmland in the U.S. southeast could be put to use as the federal government starts paying farms to grow crops for a new generation of biofuels. The U.S. Department of Agriculture said last month it will pay farmers to grow crops for so-called biomass, which ranges from trees to grass to corn cobs, and to transport them to refineries and power plants. The announcement gives a number of fledgling projects the chance to grow and become commercially viable, and could be a boon for farm owners as investors eye land for crops, officials said. "I think there's going to be a gold-rush to lower-priced lands," said Phillip Jennings, chief operating officer for Repreve Renewables, a biofuels venture partly owned by textile company Unifi Inc. "The winners are going to be the landowners." Energy from biomass is expected to remain relatively small in the near term, and it's unclear which crop -- if any -- will capture a sizable share of the markets for transportation and power-plant fuels.
The new biofuels will supplement, not replace, the vast corn-based ethanol industry. Some researchers say grasses show the most promise because they can thrive on marginal lands. Crops such as switchgrass, miscanthus and energy cane can be planted in areas where they won't compete with food crops--a big concern about biofuels. Repreve focuses on giant miscanthus, a perennial grass native to Asia. It is planted on about 10,000 acres in the Southeast now. While that is a sliver of the roughly 85 to 90 million acres of corn planted annually in the U.S., Jennings said there is growing interest from large, publicly traded companies and hedge funds to ramp up planting. BP PLC, for instance, is increasing its investment in biofuels. Earlier this year, the British oil giant bought Verenium Corp.'s bioenergy business for $98.3 million, a purchase that includes a plant in Highlands County, Fla., which will produce an estimated 36 million gallons of biofuels when it opens in 2013.
The plant will use primarily switchgras s and energy cane--a crop similar to sugar cane produced specifically for energy. The project gives a new opportunity for farmers in the southeast where citrus crops have been plagued by disease and the sod industry has collapsed because of the housing crisis, BP spokesman Tom Mueller said. The USDA's support is going to be critical for the industry to generate momentum for farmers, refineries and seed producers. It will pay farmers as much as 75% of the cost of establishing biomass crops, and then provide continued payments for up to five years. The USDA also will pay the cost of shipping the crops to the small number of biofuel plants.
No comments:
Post a Comment