Obama seeks growth in biofuels beyond ethanol

WASHINGTON (Reuters) - President Barack Obama said on Wednesday he wants to see new types of biofuels commercialized as quickly as possible, but the corn-based ethanol industry needs to remain viable in the meantime.

“My administration is committed to moving as quickly as possible to commercialize an array of emerging cellulosic technologies so that tomorrow’s biofuels will be produced from sustainable biomass feedstocks and waste materials rather than corn,” Obama wrote in a letter to a group of farm-state governors.

Most biofuel currently used in the United States is ethanol made from corn. The U.S. government wants to boost production of renewable fuels made from non-food crops like switchgrass and plant waste left over from harvesting grain.

“But this transition will be successful only if the first-generation biofuels industry remains viable in the near term,” Obama said in the letter.

Biofuels help reduce climate-changing greenhouse gas emissions, reducing the need for importing oil while creating jobs, Obama wrote.

The ethanol sector has been hit hard by high corn prices, lower oil prices, and overcapacity. New types of biofuels are currently more expensive to produce than corn-based ethanol.

Meanwhile, regulators and lawmakers are debating how to measure the impact of land-use change on the environment -- for example, emissions released when corn production displaces other crops, giving farmers the incentive to turn forests into cropland.

Poor market conditions have threatened the development of new types of biofuels, the Governors’ Biofuels Coalition told Obama in a letter earlier this year, asking him to put forth a vision for biofuels and establish a task force on the debate over biofuels’ greenhouse gas emissions.

Obama established that task force earlier this month.

The governors also asked Obama to increase the maximum allowed limit for blending ethanol with gasoline to 13 percent from the current 10 percent level to expand the market.

The Environmental Protection Agency is slated to rule on an industry request to increase the blend rate by December 1.

In his letter, Obama said the next generation of biofuels will be successful only if “long-standing artificial barriers to market expansion” are removed.

Reporting by Roberta Rampton; Editing by Gary Hill