January 18, 2012 / 11:22 PM / 7 years ago

Bill adds natgas, coal as renewable fuel source

WASHINGTON (Reuters) - Ethanol derived from natural gas and coal would compete with corn-based ethanol for a share of the U.S. motor fuel market under a bill unveiled by six U.S. House members on Wednesday.

The bill would include ethanol produced from alternative sources, such as natural gas and coal, in the federal mandate for use of renewable fuels.

Corn ethanol accounts for the lion’s share of renewable fuels, and second-generation biofuels have been slow to reach commercial viability.

Lead sponsor Pete Olson, a Republican congressman from Texas, said a larger number of feedstocks would encourage larger alternative fuel production.

An ethanol trade group, Renewable Fuels Association, said, “There is nothing renewable about fossil fuels and they have no place in national renewable energy policy.”

Also pending in the House is a bill to reduce the fuel mandate when corn supplies are tight, as they have been for a couple of years. Forty percent of U.S. corn is used to produce ethanol.

The Renewable Fuel Standard mandates the use of 13.2 billion gallons of alternative fuels this year, most of it made from corn. The mandate rises to 36 billion gallons in 2022 with 21 billion gallons from feedstocks other than corn.

Livestock producers and foodmakers say corn ethanol has driven up their costs.

A press release from Olson’s office included statements supporting the bill from the National Cattlemen’s Beef Association, the National Chicken Council and the Grocery Manufacturers Association.

The largest ethanol makers are privately owned POET, Archer-Daniels-Midland Co and Valero Energy Corp.

Reporting By Charles Abbott; editing by Jim Marshall

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