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Weighing Ethanol Quotas

December 10, 2012 | A version of this story appeared in Volume 90, Issue 50

It’s time for the U.S. government to get out of the business of picking technological winners and losers. A glaring example is the outdated mandate known as the Renewable Fuel Standard (RFS)—last modified in 2007—which has restrained the potential growth of the alternative fuels market (C&EN, Oct. 29, page 18).

Although well-meaning, the RFS requirement that only renewable feedstocks like corn be used to produce ethanol is spiking food and feed prices and violating the Administration’s widely supported “all of the above” approach. In light of the economic challenges facing the U.S., we should be using all our energy resources and ingenuity to expand the market, create jobs, and reduce our dependence on petroleum imports.

With the U.S. drought devastating corn supplies and driving up prices, the need for change has become apparent. The reality is that, even before the drought, corn prices have doubled as government mandates have required the use of increasing amounts of ethanol for fuel blending. Today, 40% of the U.S. corn crop is used for fuel.

When Congress picked corn as the winner in 2007, it did not account for advances in technology. The company I work for has developed technology that cost-effectively produces fuel-grade ethanol from natural gas, an abundant U.S. resource. No subsidies or tax credits are needed, and with the shale gas revolution, the supply of our key raw material has increased exponentially. It is also drought-proof.

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New technologies would bring relief to high corn prices and inject growth and innovation into the alternative fuels industry. The RFS program was designed for a different time and lacks the flexibility to account for innovation. RFS is inhibiting the growth of our domestic energy economy while other countries, like China and Indonesia, are moving ahead in the alternative fuels race.

But the push for change is growing. This year Rep. Pete Olson (R-Texas) introduced the bipartisan Domestic Alternative Fuels Act, which would modify RFS to allow for a broader range of domestic alternative fuel sources. This means ethanol produced from readily available and inexpensive hydrocarbons could compete in the U.S. transportation fuel market.

This is a perfect opportunity for Congress to grow the alternative fuels market, create jobs, and further reduce our reliance on foreign oil—a win for all in today’s critical economic climate.

Mark Rohr
Chairman and CEO, Celanese Corp.
Irving, Texas



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