Industry Insider: Bush Administration Put Ethanol Cart Before the Horse

February 21, 2006

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Roy Reynolds
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WASHINGTON D.C. -- Ken Hurwitz, former Executive Director of the Maryland Public Service Commission and a partner at Haynes and Boone, LLP says President Bush’s continued rhetoric on research and development as to alternative energy sources is doing little to help wean the country from foreign sources of oil.

According to Hurwitz, “the marketplace will drive the development of new sources of energy in the future, but alternative fuels such as ethanol are available today and can be readily exploited with some minor improvements in the distribution infrastructure and, of course, some vision on the part of the domestic automobile industry.

“We know how to make ethanol from corn already,” Hurwitz says.  “Let’s focus on diversifying energy supply now by putting ethanol into our gas tanks.”

1.  Production Facilities

“We need to ensure that we have facilities with the capacity to actually produce a commercially viable supply of ethanol to supplement our current gasoline supply.  Unlike technologies highlighted by President Bush last week, ethanol produced by corn is already a proven commercial technology and can be placed into the channels of commerce now,” Hurwitz said.

“The capacity to manufacture ethanol from switchgrass, wood chips and other agricultural waste could be years away. We need to energize the movement away from over-dependency on foreign oil by encouraging further use of proven, market-ready approaches like producing ethanol from corn.”

2.  Distribution Capabilities

According to Hurwitz, “we need to support a distribution system that can efficiently deliver ethanol to the end-use consumer.”  “Completing the final distribution leg must make access to ethanol as simple as making an alternate selection at your local gas pump.”

3.  End-Use Products

“Development of affordable consumer products (automobiles) that can use ethanol is of critical importance and we are already close to achieving this goal,” said Hurwitz. 

“Detroit already has the capacity to make ethanol-ready cars as evidenced by the fact that many newer vehicles can already burn ethanol at ten to 15 percent ethanol content. 

Hurwitz emphasized this point by saying, “Brazil is building an automobile fleet that already includes a large component of vehicles capable of being fueled on E85 – a blend of 85 percent ethanol and 15 percent gasoline.  Detroit can certainly emulate Brazil in adding such flex-fuel cars to their fleets.”

In sum, Hurwitz explains that, “this is not a Herculean effort.  All of the pertinent technologies and capabilities are market-ready today.

“As national strategy, it would be preferable to capture the environmental and national security benefits associated with ethanol fueled-cars now – not in five to ten years after the next R & D cycle is completed.”

Haynes and Boone, LLP is an international corporate law firm with 10 offices throughout Texas, Washington, D.C., Mexico City, Moscow and New York.

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