President Obama: $800 Million for Biofuels and Flex-Fuel Vehicles

Yesterday was a big day for the biofuels industry. President Obama issued a presidential directive to the USDA to expand access for biofuels that includes $800 million to fuel biofuels research. The purpose of the directive, in part, is to aggressively accelerate the investment and production of biofuels. What the directive does not do, is set dollars aside to help improve the infrastructure for higher ethanol blends including E85 although it encourages production of more flex-fuel vehicles.

This announcement appears to be serious, at least as serious as a government proclamation can really be– they created another committee to oversee that the presidential directive. The USDA, EPA and DOE will form a Biofuels Interagency Working Group with a mission to increase energy independence in part through the development of the nation’s first comprehensive biofuels market development program.

Secretary Tom Vilsack began implementing the directive in a conference call with Energy Secretary Stephen Chu (who has historically not been a huge fan of biofuels) and Environmental Protection Agency Administrator Lisa Jackson where he announced he will help lead an American energy and rural economic revolution.

Vilsack made a public statement today after the conference call and said, “President Obama’s announcement today demonstrates his deep commitment to establishing a permanent biofuels industry in America. Expanding our biofuels infrastructure provides a unique opportunity to spur rural economic development while reducing our dependence on foreign oil – one of the great challenges of the 21st century.”

Part of the agency’s goal is to achieve energy independence in a sustainable way that includes monitoring biofuels production using direct and indirect greenhouse gas emissions (aka Indirect Land Use). A strategy that ultimately pits one form of biofuel against another. During the call, Jackson announced that the EPA would establish four categories of renewable fuels but gave no hint as to what those categories will be but that the categories will take into consideration land use, habitat conservation, crop management practices, water efficiency and water quality, and lifecycle assessments of greenhouse gas emissions.

So what are the latest and greatest ways the new agency will utilize to save us from destruction due to fossil fuel use?

  • Refinancing existing investments in renewable fuels to preserve jobs in ethanol and biodiesel plants, renewable electricity generation plants, and other supporting industries. This also includes providing financing for plants to replace current fossil energy use with renewable energy and additional funding for new production facilities that use biomass and other non-corn feedstocks (a blow to the corn ethanol industry).
  • Making renewable energy financing opportunities from the Food, Conservation and Energy Act of 2008 available within 30 days.
  • Expansion of Renewable Energy Systems and Energy Efficiency Improvements Program, which has been renamed the Rural Energy for America Program, to include hydroelectric source technologies, energy audits and higher loan guarantee limits.

Hopefully this will be a leap forward rather than a small step. However, if the country is going to use the biofuels that are produced as part of this initiative as well as the Renewable Fuels Standard, then the government must help build the infrastructure for E85 and other higher blends like E15.


Joanna Schroeder

Joanna is a writer and consultant specializing in renewable energy and sustainable agriculture issues.