New rules on corn ethanol may hurt environment

WASHINGTON (Reuters) - U.S. corn growers expressed relief when the Obama administration unveiled new environmental rules that would boost use of corn-based biofuel, but green groups complained the guidelines may fill the air with nitrogen, a greenhouse gas viewed as more potent than carbon.

The Environmental Protection Agency unveiled what amounted to a tweaking of the national renewable fuel standard in early February, and still found that ethanol made from corn is still cleaner than conventional gasoline, dashing the hopes of some critics who opposed using food to create fuel.

The EPA’s new assessment basically calls for corn ethanol output to rise from around 12 billion gallons this year to around 15 billion gallons annually starting around 2015, which the industry was already on track to reach regardless of agency’s action.

“The effect in reality on the industry is pretty much negligible,” said John Sheehan, biofuels program director at the Institute on the Environment at the University of Minnesota.

The aim of the renewable fuel target is to move the country toward more production of advanced biofuels from sources such as wood chips.

But corn ethanol, which consumes about a third of the U.S. corn crop, will still likely make up about 42 percent of the 36 billion gallon biofuel mandate in 2022 -- something that will continue to support farmer incomes and help boost demand fundamentals of commodity markets.

Detractors of corn ethanol argue the 15 billion gallon output mandate will lead to larger corn crops, which will require the use of more fertilizers and pesticides.

Runoff from nitrogen fertilizers is already blamed for a so called “dead zone” in the Gulf of Mexico, where poorly oxygenated water is disrupting marine ecosystems.

Also, some fertilizers release nitrogen directly into the atmosphere forming greenhouse gases that are 200 times worse than carbon, said James Coan of Baker Institute for Public Policy at Rice University.

Rising corn harvests to meet more ethanol demand could exacerbate these issues, said Franz Matzner, a director for the environmental group, the Natural Resources Defense Council.

“We don’t need more corn ethanol, what we need are more of the next generation biofuels that hold better energy potential, better climate reduction potential and better potential to protect our water quality and air quality,” Matzner said.

The EPA used a method known as indirect land use change to help calculate the emissions of different fuel sources.

This method attempts to measure the emissions released when land is cleared in other countries to grow more food or biofuels to make up for the large amounts of land used in the United States to grow grains for ethanol.

The connection between U.S. agriculture and deforestation in developing countries is hotly disputed among experts and ethanol supporters.

“The responsibility for reducing C02 emissions associated with land use has to be with the folks that are actually using that land,” said Robert Brown, director of Bioeconomy Institute at Iowa State University.

Still, despite its inclusion of indirect land use in final rule, the EPA determined that ethanol produced from corn at a natural gas-fired facility using efficient technologies met the law’s criteria carbon emissions compared to gasoline.

This is where EPA rule took a wrong turn, the Baker Institute’s Coan said.

“Corn ethanol should not be credited as better than gasoline,” Coan said. “There used to be consensus that was the case, but now that nitrous oxide and land use changes are being looked at much more closely, that consensus is no longer there.”

Coan, who co-authored a paper earlier this year on U.S. biofuel policy, said indirect land use changes matter because carbon emissions are a global problem and actions in the United States can affect other countries.

Ethanol backers have questioned the findings of Coan’s paper because it was funded by Chevron Technology Ventures, but Coan pointed out that various papers have come out since 2007 questioning the benefits of ethanol.

One of the main selling points for corn ethanol is that it is supposed to be a green alternative to dirty fossil fuels. A 2007 law requires that corn ethanol produced at new plants release 20 percent less carbon dioxide than gasoline over its life cycle to qualify for the renewable mandate.

This standard will have little impact on most of the current U.S. ethanol capacity, because corn ethanol plants built before December 19, 2007 are exempt from these rules.

Many U.S. farmers and ethanol backers challenge the environmental complaints. Dave Nelson, an Iowa farmer and a representative of the Renewable Fuels Association, said ethanol producers will continue to reduce the biofuel’s carbon foot print.

“Older plants are going to adopt new technologies because it will make them more efficient and make them more money. The feed stock that the older plants will be using will be of the newest technology,” Nelson said.

Editing by Marguerita Choy