US Takes Historic Energy Steps

In late 2007, the United States took a significant step forward with respect to its energy future and in turn helped move the global renewable fuels industry forward. By enacting the Energy Independence and Security Act (EISA) of 2007, America took the most logical and immediate steps available to address our nation’s growing energy crisis and the impacts of global climate change by pairing stronger vehicle fuel economy standards with the increased use of renewable fuels like ethanol.

The Nuts and Bolts
The specifics of the legislation with respect to ethanol and renewable fuels are quite significant. Building upon the grain-based ethanol industry the United States has developed, the EISA of 2007 expanded the Renewable Fuels Standard (RFS) from 7.5 billion gallons of required annual renewable fuel use in 2012 to 36 billion gallons of renewable fuels use annually by 2022. That volume represents approximately 20 percent of the total projected motor fuel market in the United States in 2022.

The expansion of the RFS carves out specific markets for ethanol and renewable fuels based on feedstocks used for production and greenhouse gas emissions. For example, corn-based ethanol is limited to 15 billion gallons annually beginning in 2015 and must meet a 20 percent greenhouse gas emission reduction compared to gasoline. The remaining 21 billion gallons must come from advanced biofuels, including cellulosic ethanol, and achieve greenhouse gas reductions exceeding 50 percent. Specifically, the RFS requires the use of 16 billion gallons of ethanol derived from cellulosic sources annually by 2022. In addition, these gallons must lower greenhouse gas emissions by 60 percent.

The newly-signed law also contains provisions to explore ethanol blends higher than 10 percent, including studying the possibility of mandating E85 infrastructure across the country.

A Watershed Moment for Renewable Fuels
The impact of this new legislation would seem obvious at first blush. It ensures that a significant market will exist for renewable fuels like ethanol and drives technology to more sustainable processes. Certainly, a requirement to blend 36 billion gallons of renewable fuel annually provides solid footing from which the American cellulosic ethanol industry will grow.

The real importance of this legislation, and the reason it will be looked back upon as a watershed moment in United States history, is the pragmatic approach it takes in beginning to ensure a more stable and sustainable energy and environmental future.

Recognizing that there are limits to ethanol production from grain given today’s technology, this legislation reasonably limits the amount of grain-based ethanol to 15 billion gallons annually by 2015. This is an important number as anyone who has looked at the issue of food and fuel responsibly has said that American ethanol producers could produce 15 billion gallons from corn without damaging other world markets for grain.

More importantly, the legislation recognizes that to achieve the kind of renewable fuel production needed in the United States and around the globe, next generation technologies like cellulosic ethanol will be required. By providing a meaningful market for ethanol from non-grain sources, it signals ethanol producers and investors alike that the time is right to accelerate the research and development of next generation technologies. It allows them to take greater financial risks that will lead to commercialization of cellulosic ethanol technology much sooner than conventional wisdom suggests.

The renewable fuels industry, both in the United States and around the globe, is far from a mature industry. It continues to face opposition from established interests who are desperately seeking to maintain the control over world energy markets they have enjoyed for decades. To fully realize the benefits of a robust global renewable fuels industry, it is incumbent upon nations to develop, implement and use renewable fuel technologies that most appropriately meet their needs. By enacting the Energy Independence and Security Act of 2007, the United States is sending a signal to the world that it is committed to the promise of renewable fuels.