ARI SHAPIRO, HOST:
The Environmental Protection Agency is putting the brakes on ethanol, the renewable fuel made from corn and other plants. Farmers in the Midwest have made good money growing corn for ethanol. To do that, they've plowed up lots of grassland. And that cancels out much of the hope for carbon savings. While the EPA still supports ethanol, it wants to take some of the focus off corn, and put it back on greener ways of making ethanol. Grant Gerlock of NET News in Nebraska reports.
GRANT GERLOCK, BYLINE: Every year, the EPA decides how much ethanol goes in our gas through something called the Renewable Fuel Standard, or RFS. In its new proposal, that mandate would include 14 billion gallons of corn ethanol next year. It's a small increase but less than Congress first called for back in 2007. Iowa State ag economist Bruce Babcock says it doesn't sit well with some farm groups that want ethanol to support corn markets.
BRUCE BABCOCK: They think there's nothing wrong with the 15 billion gallon mandate that they think that they deserve. So that's why they're not happy.
GERLOCK: One of the goals of the mandate is to stimulate the rural economy. But it's also supposed to cut greenhouse emissions, and that's difficult when farmers plow a prairie to grow even more corn. Corn ethanol was meant to pave the way for farmers to grow new energy crops that are better at cutting carbon emissions. But that really hasn't happened. Instead, corn ethanol dominates the industry, and those news crops haven't taken root - crops like the switchgrass that Rob Mitchell is standing in north of Lincoln, Neb. It's lush and green and about knee-high right now.
ROB MITCHELL: This is Liberty switchgrass, and Liberty will get, oh, 8 or 10 feet tall.
GERLOCK: Mitchell is a researcher for the U.S. Department of Agriculture. He studies how to grow switchgrass for cellulosic ethanol, which can save three times as much carbon as ethanol made from corn. Switchgrass grows well on land that's too wet or too dry for corn, and it's also perennial, putting down deep roots that store carbon.
MITCHELL: Even on these very marginally productive sites, within about five years, we're seeing that we're starting to store about a ton of carbon per acre per year.
GERLOCK: How many farmers are growing switchgrass for ethanol right now?
MITCHELL: I think I can count zero at this point. We're not producing any ethanol from switchgrass at this point on a large scale.
GERLOCK: There are a couple large-scale plants in Iowa making cellulosic ethanol from cornstalks. One in Kansas uses wheat straw. But it's a drop in the bucket, and investment in new technology has nearly dried up as investors wait for a green light from the EPA. Michael McAdams of the Advanced Biofuels Association says there's a constant tug-of-war between oil and ethanol. Both lobby the EPA for a bigger share of your gas tank. One result is that the agency hasn't set quotas for two years. And investors know cellulosic ethanol just can't compete without a mandate.
MICHAEL MCADAMS: Without the regulatory certainty, it's made us, you know - it's put us - I call us the Collateral Damage Association.
GERLOCK: McAdams worries that the process is beyond repair and suggests Congress rewrite the mandate with an emphasis on alternatives to corn ethanol. There are proposals in both the House and Senate, but they don't appear to be getting traction. Jeremy Martin of the Union of Concerned Scientists doesn't think an overhaul is necessary. The EPA's proposal brings the mandate up to date and sets a big goal for cellulosic ethanol. Martin thinks investors will step up once they know what they're dealing with.
JEREMY MARTIN: Even if it's not what they'd hoped for, at this point, just - you need to know where you stand so you can make decisions about how to move forward.
GERLOCK: USDA researcher Rob Mitchell says until the cellulosic industry takes off, switchgrass will remain a hard sell in farm country, and ethanol will still use a lot of corn.
MITCHELL: The market for cellulosic ethanol just isn't there yet. If you want a farmer to do it, it's got to pay the bills. And we're fully aware of that.
GERLOCK: Farmers need investors to put money into new processing plants. Those investors need farmers to give up some of their corn for switchgrass. And both await the EPA's final mandate. For NPR News, I'm Grant Gerlock. Transcript provided by NPR, Copyright NPR.
