Would ethanol help the environment? Obama administration can’t decide

As President Obama looks to take legacy-defining actions while facing a hostile Congress, one of his more challenging decisions involves what goes into the fuel tanks of America’s cars.

For months, the administration has dismayed innovators and environmentalists with its skepticism of requirements that gasoline contain escalating amounts of ethanol. The untidy politics of ethanol -- an additive that has done a great deal to bolster the corn industry but has fallen short in delivering marketplace innovations -- have bedeviled the Environmental Protection Agency and put Obama at odds with longtime allies on the left.

But while the administration keeps talking about rolling back requirements that millions of gallons of ethanol be blended into the nation’s gasoline supply, it also keeps not taking action.

On Friday, it delayed making any decision until next year.

The November election may have had something to do with that. The Republicans who now control both the Senate and House have little interest in new initiatives to combat global warming. Many of them question whether climate change is a real threat. Ethanol mandates, flawed as they may be, are one of the few tools the administration has to unilaterally advance a green-energy agenda.

The administration is getting pressure from all directions on the ethanol issue.

The oil industry, clearly alarmed by the EPA’s plan to delay action, is redoubling its efforts to persuade Congress to scrap the entire program of ethanol requirements, called the Renewable Fuel Standard.

“The Renewable Fuel Standard was flawed from the beginning, horribly mismanaged, and is now broken,” said a statement from Jack Gerard, CEO of the American Petroleum Institute.

“The only real solution is for Congress to scrap the program and let consumers, not the federal government, choose the best fuel to put in their tanks. Failure to repeal could put millions of motorists at risk of higher fuel costs, damaged engines, and costly repairs.”

The sentiment is backed by a large coalition of auto enthusiasts. The American Automobile Association has been lobbying aggressively for a rollback. Car manufacturers warn that fuel tanks are in danger of being saturated with ethanol, and warranties could be voided.

But the fuel standard has some influential backers, and not all of them are corn growers.

The EPA’s announcement Friday that it will delay action came after its plan to roll back the requirement was denounced by influential lawmakers. Gov. Jerry Brown and Sen. Barbara Boxer warned that scrapping the rule would scuttle research into new fuels made from such things as algae and agricultural waste and undermine state efforts to fight climate change.

The EPA on Friday said such concerns were a chief reason it was holding off on a decision.

In response, the national network of scientists, startups and agribusiness companies involved in producing ethanol are racing to show the EPA they can, indeed, produce the next generation of biofuels that the renewable fuel rule was designed to advance.

Ethanol backers note that only weeks ago plants in the Midwest that generate fuel out of corn waste -- husks, stalks and cobs – got up and running. Some owners of corn ethanol plants are adding retrofits so that they, too, can produce fuel from such agricultural waste.

The aim is to get millions of gallons of next-generation fuels into the marketplace before the EPA needs to act. That could prove to the agency that such fuels are viable and that the ethanol mandate is helping bring them to the market.

“This is the only federal law that does anything to reduce greenhouse gas emissions in transportation,” said Neil Kohler, CEO of Sacramento-based Pacific Ethanol. The administration’s signature climate change policy, which involves reducing emissions from power plants, is years away from being fully in place, he noted.

The ethanol mandate “is the only law the federal government has in place to address climate change now. Period. End of story. We need the EPA to stand behind this,” he said.

Follow @evanhalper on Twitter for more on the politics of ethanol.