Calif. mandate triggers ethanol backlash

Source: Adam Belz • USAToday  • Posted: Monday, March 19, 2012

A California rule assigning higher carbon scores to fuel produced outside the state has drawn the ire of the ethanol industry and the Midwestern states that produce most of the ethanol in the U.S.

At least seven states – Nebraska, Iowa, Kansas, Michigan, Missouri, North Dakota and South Dakota – are opposing California’s effort to enforce the mandate, which critics say threatens the renewable fuels business in the nation’s grain belt.

In Iowa alone, ethanol plants consume 60 percent of the corn crop and churn out $15 billion in annual revenue.

And since other states and regions often follow California’s lead on environmental questions, advocates for corn-based ethanol say the battle is crucial.

“What happens in California tends to be the model for what happens in the rest of the country,” said Chris Thorne, a spokesman for Growth Energy, an ethanol and biofuels trade group.

U.S. ethanol plants produce about 13.8 billion gallons of fuel per year, according to the the state of Nebraska, and 85 percent of it comes from the top 10 producers – Iowa, Nebraska, Illinois, Minnesota, Indiana, South Dakota, Ohio, Wisconsin, Kansas and North Dakota.

In December, a federal judge blocked California’s Air Resources Board from enforcing the regulation, which encourages refiners to blend gasoline with ethanol produced in Brazil or California. The California rule considers Midwestern ethanol to have a larger carbon footprint. The judge said the rule unconstitutionally interferes with interstate commerce. California officials are appealing the decision.

The rule hinges on the concept of indirect land use change, Thorne said.

The idea is that if farmers in the U.S. sell their grain for ethanol, farmers in other parts of the world must grow more corn for the food supply, pumping more carbon into the atmosphere, he said.