The Obama Administration opened up the throttle on biofuel research today, announcing plans  to pour $786 million into new ways to convert corn, wood, grass, and municipal waste into fuel for America's cars. The new R&D funding comes from the Department of Energy's portion of the $787 billion stimulus package approved in February. The money is supposed to be spent quickly, so most of it ($656 million) will help pay for "biorefineries" that demonstrate existing technologies. Another $110 million, however, will go for research, including $50 million for a research consortium devoted to fuel-generating algae.
In a simultaneous announcement , the Environmental Protection Agency (EPA) proposed rules for carrying out a 2007 law that requires a threefold increase in the use of renewable fuels, reaching 36 billion gallons by 2022. But EPA's draft regulation refused to take a position on the controversial issue of whether corn-based ethanol or soybean-derived biodiesel actually qualifies as a "renewable fuel" under this standard. Instead, EPA laid out several options for evaluating such fuels, using different assumptions, and invited public comment.
To qualify as a renewable fuel and profit from the new Renewable Fuel Standard, an alternative fuel must reduce greenhouse gas emissions by at least 20% compared with gasoline. (Ethanol and biodiesel plants that are already operating or under construction do not have to meet this standard.) According to analyses that have been published  in Science and carried out  by the California Air Resources Board, corn-based ethanol is actually worse than gasoline, mainly because growing more corn for ethanol forces farmers to clear additional grasslands and forests to grow food crops.
But it's possible to play games with these numbers. Most of the emissions from clearing land happen right away, a step that makes corn ethanol's greenhouse emissions look very bad at first before they gradually improve over longer and longer time periods. In sample calculations, EPA looked at greenhouse emissions from ethanol and biodiesel over 30 and 100 years. In the 30-year case, nearly all types of corn ethanol plants flunked the test. Extending the period of analysis to a full century, however, allowed ethanol plants using the most efficient technologies or burning biomass for energy to meet the standard.
The Biotechnology Industry Organization, which represents mostly companies developing new technologies for extracting energy from crops, applauded today's announcements. The Renewable Fuels Association, representing ethanol producers, was more cautious. It welcomed the Administration's endorsement of biofuels but rejects the idea that greenhouse gas emissions from land-clearing should count against biofuels.
David Tilman, an ecologist at the University of Minnesota, Twin Cities, who’s been studying the environmental effects of biofuels, calls the EPA announcement “an important step in the right direction.” A full accounting of the impact of biofuels on the environment is important, he says, but scientists don’t yet know how to do it well.