Ethanol Beyond Corn
Dirk Lammers  /  AP
An ethanol plant in Chancellor, S.D. By mandating a boom in ethanol production from sources other than corn by 2022, the energy bill President Bush signed Wednesday presents a huge opportunity for the nation’s biofuels industry.
updated 12/19/2007 3:06:54 PM ET 2007-12-19T20:06:54

President Bush signed into law Wednesday legislation that will bring more fuel-efficient vehicles into auto showrooms and require wider use of ethanol, calling it “a major step” toward energy independence and easing global warming.

The legislation signed by Bush at a ceremony at the Energy Department requires automakers to increase fuel efficiency by 40 percent to an industry average 35 miles per gallon by 2020. It also ramps up production of ethanol use to 36 billion gallons a year by 2022.

Bush said the new requirements will help “address our vulnerabilities and dependency” on foreign oil by reducing demand for gasoline and diversifying the nation’s fuel supply.

“We make a major step ... toward reducing our dependence on oil, fighting global climate change, expanding the production of renewable fuels and giving future generations ... a nation that is stronger cleaner and more secure,” said the president.

Bush was flanked by Democrat and Republican members of Congress who had ushered the legislation through.

The House passed the energy bill Tuesday by a 314-100 vote after the Senate cleared it last week following lengthy negotiations and sometimes testy confrontations. Bush had vowed to veto the original legislation passed by the House because it included $21 billion in taxes.

The tax provisions were dropped to get the bill approved.

Congress delivered the legislation to the White House late Tuesday in a gas-hybrid sedan.

Bush noted that earlier this year he had proposed a plan to cut gasoline use by 20 percent over the next 10 years. But the president has long opposed arbitrary numerical standards for vehicle fuel economy.

The legislation increases the federal standard automakers must meet to an industry wide 35 mpg for passengers cars, SUVs and small trucks. The standard for cars today is 27.5 mpg and for trucks and SUVs 22.2 mpg.

It requires refineries to increase the use of ethanol from about 6 billion gallons a year this year to 36 billion gallons by 2022 and mandates that by then at least 21 billion gallons are to come from feedstocks other than corn.

Bush praised that provision which would spur the development of ethanol from cellulosic feedstocks such as prairie grass and wood chips.

“We understand the hog growers are getting nervous. The price of corn is up,” said the president.

Flanking Bush were Senate Majority Harry Reid of Nevada and House Speaker Nancy Pelosi of California as well as Rep. John Dingell, D-Mich., a longtime protector of the auto industry. Dingell played a key role in working out a compromise on the vehicle fuel economy measure.

Democrats have hailed the legislation as a turn to a new direction in U.S. energy policy.

“I firmly believe this country needs to have a comprehensive energy strategy,” said Bush before signing the bill. He referred to the need for more nuclear energy and domestic oil production — issues that the new energy bill ignores.

Instead, the bill focuses largely on conservation, calling for more energy efficiency in “light bulbs to light trucks” as Dingell observed during the House debate on the legislation.

“This is a choice between yesterday and tomorrow” on energy policy, Pelosi said Tuesday shortly before the House passed the bill, sending it to the White House.

The bill also calls for improved energy efficiency of appliances such as refrigerators, freezers and dishwashers, and a 70 percent increase in the efficiency of light bulbs. It also calls for energy efficiency improvements in federal buildings and construction of commercial buildings.

The new lighting standards alone are projected to lower consumers’ annual electricity bills by $13 billion in 2020, remove the need for 60 mid-size power plants and reduce emissions of carbon dioxide, the leading greenhouse gas, by 100 million tons a year, said the advocacy group Alliance to Save Energy.

Democrats said the fuel economy requirements will save motorists $700 to $1,000 a year in fuel costs and reduce oil demand by 1.1 million barrels a day when the fuel-stingy vehicles are widely on the road.

The overall bill including more ethanol use and various efficiency requirements and incentives, will cut U.S. oil demand by 4 million barrels a day by 2030, more than twice the current daily imports from the volatile Persian Gulf, Democrats said.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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