‘Dumb Law’ Blocking Promising New Fuel Source

A new technology that could revolutionize the fuel industry is being curtailed by a federal regulation that Forbes magazine calls a “dumb law.”

At issue is the production of ethanol, which is added to gasoline purportedly to reduce pollution and reduce America’s reliance on foreign oil.

This year Americans will use 14 billion gallons of ethanol, made from 5 billion bushels of corn — one third of the total U.S. crop — grown on 33 million acres of farmland. And since 2005, when Congress required that ethanol be added to gasoline, U.S. corn prices have tripled, according to Forbes, contributing to higher food prices across the board.

The Dallas-based chemicals company Celanese has developed the technology to produce ethanol by tearing apart and recombining hydrocarbons found in America’s plentiful supplies of natural gas and coal.

“The problem isn’t science. It’s Washington,” Forbes observes. “Thanks to the 2007 Renewable Fuel Standard (RFS) law, gasoline refiners are mandated to blend so much plant-based or renewable ethanol into the gas supply that it prevents Celanese or any other fossil-fuel-based ethanols from even competing for the market.”

Now 13 congressmen led by Pete Olson, whose Houston-area district is home to Celanese’s largest plant, have introduced a bill allowing ethanol made from natural gas to substitute for some corn-based ethanol mandated by the RFS law.

“We would prefer not to have the RFS at all,” an Olson spokesperson told Forbes, “but this is a step in the right direction.”

Meanwhile Celanese is building a plant in Texas designed to produce less than 6 million gallons of ethanol a year. The company is also building a plant capable of producing 80 million gallons a year — in Nanjing, China.