U.S. lawmakers back ethanol on Capitol Hill

WASHINGTON (Reuters) - It is harder to find a lawmaker who isn't singing the praises of fuels blended from home-grown corn and other renewable sources despite many divisions in the U.S. Congress over how to deal with the U.S. energy supply crunch.

Ethanol's growing mainstream appeal means that, for a change, subsidizing the renewable fuel will not be an issue when Iowans caucus to indicate their preferences for presidential candidates in 2008.

Lawmakers outside the Corn Belt objected for years to rising U.S. mandates to blend more ethanol with gasoline supplies, pointing to various transportation bottlenecks that hinder supplies from reaching the east and west coasts.

There are long-standing disagreements in Congress on how to deal with energy policy regarding drilling for oil in Alaska's wildlife refuge and global warming.

But with a rising focus on U.S. "energy security" and calls from both the Bush administration and Congress for "energy independence," ethanol is the undisputed king of the U.S. energy policy road.

These days, lawmakers are nearly unanimous in their support, said Monte Shaw, president of the Iowa Renewable Fuels Association, speaking at the Reuters Global Biofuel Summit.

"I'd like to say it's going to play a huge role (in the 2008 elections) but so far I haven't found anyone who isn't really excited about it," Shaw said, referring to ethanol.

Even Republican maverick Sen. John McCain of Arizona, considered a presidential candidate front-runner, has fallen largely silent on past opposition to subsidies and tax breaks for farmers to grow corn and turn it into ethanol, Shaw said.

The U.S. biofuels industry, now centered in the Midwest, could become a nationwide industry as cellulose becomes as an abundant and widespread feedstock, said Rep. Collin Peterson, chairman of the House Agriculture Committee.

"There's interest in every state," Peterson said. "Make this a national effort, not a Midwest effort or a traditional Farm Belt effort."

Biorefineries produced about 5 billion gallons of ethanol last year, well on the way to the U.S. target of using at least 7.5 billion gallons of renewable fuels annually by 2012.

Congress is abuzz with new bills to require even more ethanol use in coming years.

A group of Midwest senators, including prospective presidential candidate and Illinois Democrat Barack Obama, introduced the BioFuels Security Act, which would require the United States to use 60 billion gallons of ethanol and biodiesel a year by 2030.

Not to be outdone, President Bush is mulling plans -- possibly to be unveiled in next week's State of the Union address to Congress -- to expand ethanol use by a similar amount, a source briefed by the White House said on condition of anonymity.

The Bush administration must provide funding in its budget if it truly wants more renewable energy usage, said Senate Agriculture Committee Chairman Tom Harkin.

"Excuse me if I'm a little skeptical about Bush's proposal to decrease our energy dependence," the Iowa Democrat told reporters.

"If the President is going to propose a massive increase in biofuels you just have to ask one question: 'Where is it coming from?'" Harkin said "Well, it's going to come from our farms and ranches."

(Additional reporting by Charles Abbott)