ETHANOL

[timhyma]

Gov. Edward G. Rendell last week signed legislation designed to increase the production of biofuels statewide and boost an ailing economy.


"Record-high fuel prices are straining family budgets and pinching the bottom lines of our businesses," Rendell said at a July 10 bill-signing ceremony in the Army National Guard Facility in Plymouth Meeting.

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"We need to reduce our dependence on foreign oil and keep our energy dollars in Pennsylvania - to invest in our economy and create jobs."

Rendell signed two separate bills at the ceremony. The first, Special Session Senate Bill 22, requires the state to create an annual $5.3 million subsidy for in-state biodiesel producers, providing eligible companies with up to $1.9 million per year each until June 30, 2011.
House Bill 1202, sponsored by State Rep. Mike Gerber (D-148), requires fuel producers to blend increasing quantities of biofuels with petroleum as in-state production of biofuels rises.

All gasoline available for retail sale must contain 10 percent cellulosic ethanol once production of that fuel reaches 350 million gallons. (Most cars can run on 10 percent ethanol without being modified, according to Rendell.)

Once in-state production of ethanol and other biofuels reaches 400 million gallons, diesel fuel retailers will be required to sell a blend containing 20 percent biofuel. Blending requirements will increase over time, starting with 2 percent biofuel when in-state production hits 40 million gallons.

Pennsylvania biodiesel producers currently can put out 60 million gallons per year. A facility under construction in Clearfield County, a rural area in the midwestern part of the state, is expected to produce another 100 million gallons per year.

If widely used, cellulosic ethanol could reduce greenhouse gas emissions, a major contributor to global warming, by up to 86 percent, according to the U.S. Department of Energy, while biodiesel could cut those emissions by 50 percent.
When the governor first introduced his energy plan 16 months ago, there was no provision calling for increased production of cellulosic ethanol, which is derived from non-food sources.

But corn-based ethanol has since been linked to rising food prices worldwide, as many American farmers have decreased food production in favor of planting corn for fuel.
Rendell's administration pushed for changes to the legislation to address concerns about food prices and tap into the state's variety of biofuel sources.

"Pennsylvania can be to cellulosic ethanol what corn-based ethanol was to Iowa and the Midwest," Rendell said. "Pennsylvania has an abundant supply of cellulosic ethanol feedstocks, including switchgrass, woodchips, municipal waste and agricultural waste. This alternative fuel law ensures that Pennsylvania farmers and businesses will fully realize the benefits of these resources."
Increased biofuel production will also create more jobs in Pennsylvania, according to Rendell.

A research study commissioned last year by PennFuture, a state nonprofit that lobbies for environmentally sound investments, concluded that offsetting 900 million gallons of petroleum-based vehicle fuel with fuels derived from coal and renewable energy sources, including biofuels, could create up to 25,775 new jobs in the state economy and generate $1.5 billion in new revenues.
But Rendell noted that increased biofuel production alone will not resolve the state's lingering environmental and economic issues.

"We can never make production to meet demand," he said. "We have to reduce demand. We have to incentivize conservation, and we have to do it quickly."

Rendell said the state legislature will address conservation this fall along with the 30 to 70 percent rise in electricity prices expected to come next year when the legal cap on energy prices expires.



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