This methanol can now be added to standard diesel and gasoline, just as ethanol is, and used in standard vehicles.
California won't allow public water utilities to use water containing MTBE with concentrations higher than 5 parts per billion, a standard cheered on by greenies and ethanol makers.
While some tax incentives do exist (for ethanol and wind energy), there are no federal energy mandates besides a meager Renewable Fuel Standard passed last year by Congress to boost production of ethanol and biodiesel.
The standard sets targets for the amount of ethanol production in the country through 2022 and allows for long-range planning in the industry, says Matt Hartwig, spokesman for the Renewable Fuels Association.
On the fuel side, we have ethanol subsidies and the Renewable Fuel Standard, which is an implicit subsidy program.
This year the standard is 12.6 billion gallons of corn ethanol, which the industry expects to exceed, with other renewables to contribute a little more than 2 billion gallons.
The sharp increase was due to government mandates on ethanol use, the so-called Renewable Fuels Standard.
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Last year alone, the Standard diverted 40 percent of all U.S. corn towards ethanol production.
The food-to-fuel mandate is known as the Renewable Fuels Standard (RFS) and requires 13.2 billion gallons of ethanol to be blended into the gasoline supply this year and 36 billion gallons by 2022.
The Federal Renewable Fuel Standard (RFS) continues to force refiners to sell larger amounts of corn ethanol and other biofuels each year, regardless of weather, supply demand, or cost influences.
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The new Renewable Fuel Standard (RFS2), which took effect on July 1st, limits conventional ethanol to 15 billion gallons of the annual 36 billion gallons of renewable fuel that must be used for transport by 2022, and the administration has just announced extra funding for algae-based biofuels (see article).
The Renewable Fuel Standard currently requires transportation fuel to contain certain amounts of renewables such as corn grain ethanol regardless of how high it pushes corn prices or how much weather conditions or tariffs on imported ethanol have reduced supplies.
The boom in ethanol has been driven by three main components--a blenders' credit that creates an incentive for producers who add ethanol to their fuel, an import tariff that keeps out foreign competitors, and a renewable fuels standard that sets the level of production.
The Renewable Fuels Standard builds in "safety valves" in the event of extreme economic harm in states or regions or if the ethanol industry does not produce an adequate supply.
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