Ethanol amendment sought in farm bill

By Chris Baltimore

WASHINGTON (Reuters) - A U.S. lawmaker on Tuesday offered an amendment to the farm bill that would require 15 billion gallons of conventional ethanol to be blended with U.S. gasoline supplies by 2015 -- about double current usage levels.

Pete Domenici of New Mexico, senior Republican on the Energy Committee, wants to include a "renewable fuel standard" nearly identical to one included in an energy bill passed by the Senate in June.

Four other senators from big corn-producing states like Iowa and Nebraska backed Domenici's plan, which would require 36 billion gallons of ethanol use by 2022, with 21 billion gallons of that coming from advanced biofuels like cellulosic ethanol, which is made from non-food sources like switchgrass.

Corn prices are near record levels, mostly due to stellar growth in demand for ethanol. Iowa and Illinois lead the nation in corn production.

The Senate energy bill has stalled in negotiations with House leaders about how to reconcile differences between the two bills. Domenici said Congress needs to act now to boost U.S. fuel supplies as crude oil prices set new records near $100 a barrel.

It's not clear whether Majority Leader Harry Reid will allow the renewable fuel measure to be considered with the farm bill. Reid earlier indicated that some amendments might not be considered.

"I cannot think of an amendment more relevant to the economic security of the American farmer than an amendment to increase the renewable fuel standard," Domenici said.

If accepted, the amendment would substantially boost ethanol incentives in the farm bill, which currently includes about $1 billion in loans to encourage commercial-scale cellulosic ethanol refineries online.