WASHINGTON, D.C. – In a letter hand delivered to the White House today, Renewable Fuels Association (RFA) President and CEO Bob Dinneen urged the Obama Administration to maintain its commitment to the commercialization of cellulosic ethanol and other advanced biofuels. The RFA letter is in response to a White House memo seeking presidential guidance on the future of the Department of Energy (DOE) loan guarantee program.

"We strongly encourage you to not only continue with the program, but to transform it so it is more accessible for cellulosic and advanced biofuel companies," Dinneen wrote to President Obama. "In addition, we encourage you to push Congress to restore the funds taken from the program to pay for the Cash for Clunkers initiative and a bailout for states earlier this year. Restoring these funds and accelerating their distribution is one way to quickly add American jobs that cannot be outsourced."

Going a step further, Dinneen urged the president to not only retain, but reform the current renewable energy loan guarantee program to ensure advanced biofuel technologies are given a fair chance.

"As Congress intended, the loan guarantee program established by the 2005 energy bill was meant to provide access to much-needed capital for developing and nearly commercial renewable energy technologies - both for power generation and liquid transportation fuels," wrote Dinneen. "The markets for electricity and fuels function differently. As such, the loan guarantee program must reflect these differing real-world circumstances in determining the qualifications of various applicants. Yet, as currently structured, the program seems disproportionately focused toward power generation projects to the disadvantage of cellulosic and advanced biofuel technologies."

In its letter, the RFA reiterated previously voiced concerns over DOE's implementation of the loan guarantee program and its apparent focus on power generation over liquid transportation fuels. The RFA also supported proposals from White House advisors contained in the leaked memo to streamline the application process. According to Dinneen, "this would rapidly provide capital to many shovel-ready advanced biofuel projects," provided ongoing concerns about the program criteria were addressed.

The RFA also encouraged the Environmental Protection Agency (EPA) to be cognizant of the impacts it revisions of cellulosic ethanol requirements have. The RFA implored EPA to "recognize that its projections send signals to the financial community that either encourage or discourage investment in emerging technologies." The RFA urged a more optimistic view from EPA, particularly if concerns with the loan guarantee program can be addressed.

Finally, the RFA urge a combination of sensible initiatives like those proposed by Ag Secretary Tom Vilsack on October 21, as well as forward-looking tax policies like refundable investment tax credits to stimulate advanced biofuel production. Dinneen wrote that such proposals "would be excellent steps to putting the commercialization of cellulosic ethanol and other advanced biofuels back on the fast track."

Dinneen's letter to President Obama can be read here.

SOURCE: Renewable Fuels Association