U.S. Senators Barack Obama (D-IL) and Tom Harkin (D-IA) yesterday introduced a bill to immediately update the Renewable Fuels Standard (RFS) to require the production of 18 billion gallons of renewable fuels by 2016 including 3 billion gallons of advanced biofuels, such as cellulosic ethanol. The legislation will implement the RFS requirements that were included in the energy bill passed by the Senate in June. However, negotiations between Senate and House on competing energy bills have stalled, and the new RFS has yet to take effect. Obama and Harkin's bill recognizes the need for prompt action to update these renewable fuel requirements to provide market certainty to small, local, and farmer-owned ethanol producers.
Despite a boom in production of ethanol by small plants across the country, most consumers around the country have been unable to fill up their cars and trucks with E85 gasoline because of problems in the distribution of ethanol and obstacles to greater ethanol distribution by oil companies. The average spot market price for ethanol has dropped 30 percent over the past six months. With ethanol prices dropping this severely, according to the New York Times, "there is likely to be a sweeping consolidation of the industry, and some small companies could go out of business."
Without the market stability provided by an increased RFS, many small ethanol plants would face increasing financial danger that could cause them to fail, which would not only jeopardize an important bridge to the next-generation of cellulosic fuels, but also hurt farmers, small ethanol produce