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The Congressional Budget Office (CBO) has released a new report, “Using Biofuels Tax Credits to Achieve Energy and Environmental Policy Goals,” that according to the Renewable Fuels Association (RFA), takes the issue of ethanol tax incentives out of context. The report provides no comparison to other technologies or types of biofuels against the destruction that goes hand in hand with fossil fuel production, cites RFA. The association plans to post a detailed analysis on its blog.

RFA President Bob Dinneen expanded on the issues his organization has taken with the report. “It may seem penny-wise, but would be pound-foolish to dismiss the benefits of current biofuels in light of the havoc wrought by our dependence on fossil fuels,”

“Analyzing American energy policy cannot occur in a vacuum. To effectively address the energy, environmental and economic problems caused by our addiction to oil, we need to take a holistic approach,” continued Dinneen. All comprehensive analyses demonstrate that ethanol provides a real world, cost effective tool to reduce dependence on oil and create domestic jobs. Additionally, as CBO rightly notes, ethanol also reduces carbon emissions compared to gasoline.”

Also missing from the CBO report, says RFA, is the discussion about the continual evolution of ethanol production. Biotechnology Letters recently published a study that demonstrated that ethanol production has reduced water use by 20 percent and overall energy use by 28 percent in less than 12 years. During this same time period, ethanol plants have increased yields and produce valuable co-products.

However, what RFA felt was done correctly in the report was the exclusion by CBO of international indirect land use change (ILUC) and its estimates of CO2 reduction costs. This theory has been highly debated for several years and is under fire due to the scientific inability to prove it’s assertions.

“There is no renewable technology available today that can match ethanol’s ability to reduce oil use and create jobs, all while emitting fewer climate changing gases than gasoline,” said Dinneen. “New biofuel technologies, like cellulosic ethanol, promise to provide even greater benefits. Unfortunately, it appears CBO has chosen to take a narrow, time constrained look at the issue and has failed to
consider the much larger picture.”

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The high volume of ethanol exports plummeted in May by 58 percent from April’s totals. U.S. producers exported just 17.1 million gallons in May, while they exported 40.8 million gallons in April and 48.3 million gallons in March. Despite the drop, May exports were still above the five-year monthly average. In addition, to date in 2010, the U.S. has exported 25 percent more product than in the entire 2009 calendar year.

Additionally, at 141.4 million gallons, 2010 U.S. exports are still on track for a record year. In 2008, exports totaled 157.8 million gallons and in 2007, they were 150.2 million gallons. Prior to this year, it is believed that the highest export year was in 1995 when 197.5 million gallons of denatured and undenatured ethanol were exported. Since January 2005, the monthly average for total ethanol exports has been 10.2 million gallons.

“Fluctuations in unpredictable ethanol export markets highlight the need for America to focus more attention on increasing its consumption of domestically produced ethanol,” said RFA President Bob Dinneen. “America must stop dragging its feet and move aggressively to open up more domestic markets to ethanol. This starts with a full and complete waiver for the use of E15 by EPA. Bifurcating the market or limiting E15 use by vehicle model year aren’t real solutions. Exports and the use of mid and higher level ethanol blends, such as E30 or E85, are important markets for ethanol, but they cannot expand fast enough to absorb increasing production and use of ethanol as called for by federal law. It is time for the Obama Administration to back up its rhetoric with action and increase the amount of ethanol American consumers can use.”

The past month, the majority of denatured ethanol exports, topping out at 11.2 million gallons and down from 24.9 million gallons in April, went to Canada and the Netherlands. After importing significant quantities in April, Jamaica, the United Kingdom, Singapore, and United Arab Emirates (UAE) imported virtually no U.S. denatured ethanol in May.

Undenatured, non-beverage ethanol exports totaled just 5.9 million gallons in May. Top destinations were the Netherlands, UAE and Mexico. Those three nations accounted for more than 95% of U.S. exports of undenatured, non-beverage product.