August 16, 2011 / 6:52 PM / 9 years ago

Obama administration to stimulate biofuel industry

WASHINGTON (Reuters) - The Obama administration on Tuesday announced a $510 million initiative to boost the production of next-generation biofuels.

Under the plan sponsored by the Navy, Energy and Agriculture departments, companies will be invited to bid on new biofuel projects where the government will match the investment.

“The President understands that for us to be more competitive economically and for us to be more secure, we need a diversification in our energy choices rather than continuing to blindly support oil producing monopolies,” Secretary of Agriculture Tom Vilsack said.

In March, President Obama set the goal of reducing oil imports by one-third by 2025.

Projects would involve producing fuels from wood chips and inedible parts of plants, as opposed to more traditional biofuels such as those made from corn..

“It will support development of a new, rural-focused industry that will replace imported crude oil with secure, renewable fuels made here in the U.S,” Energy Secretary Steven Chu said.

The use of corn to make ethanol has been criticized for helping to drive up the price of the crop, hurting the poor globally.

Reporting by Malathi Nayak

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