From Reuters, December 17, 2008 -

The United States will fall well short of biofuels mandates on the uncertain development of next-generation fuels made from grasses and wood chips, the government's top energy forecasting agency said on Wednesday. "The key risk factor is rate of development of cellulosic biofuels technology," Howard Gruenspecht, the Energy Information Administration's acting head, said at press conference in Washington introducing the agency's annual energy forecast. "Near term growth of cellulosic ... is certainly a question mark."

The country, the world's top producer of the main biofuel ethanol, will only blend about 30 billion gallons of fuels like corn-based ethanol and the advanced fuels into gasoline by 2022. That is about 17 percent short of the U.S. mandate of 36 billion gallons by that year, the EIA said in the forecast. The United States enacted the mandate, known as the Renewable Fuels Standard, late last year in an effort to provide jobs and begin to wean the country off foreign oil. It calls for corn ethanol, but also an increasing amount cellulosic ethanol made from fast-growing grasses and trees, and biodiesel made from non-food sources. Cellulosic is not yet made commercially.

Loopholes in the mandate that allow regulators to waive the requirements, if needed, could also result in lower blending, Gruenspecht, said. So far, such waivers have not been approved. In August, U.S. environmental regulators rejected a request from Texas Gov. Rick Perry to halve the mandate, which he blamed for boosting corn prices and making it costly for farmers to feed livestock.

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