The politics of ethanol outshine its costs

"You're not going to get real change by specifying a fuel level in the market, as this energy bill does," she says. "We have to make sure cars in this country can burn a variety of fuels so oil has some competition."

Boosting corn-ethanol production "could change current irrigation practices and greatly increase pressure on water resources," the National Research Council concluded in a study released last month.

In a letter to Speaker of the House Nancy Pelosi last month, 28 environmental groups decried the RFS saying it would "lead to substantial environmental damage and a system of biofuels production that will not benefit family farmers ... will not promote sustainable agriculture and will not mitigate global climate change."

Much of the criticism targets today's corn-based variety. But if companies can figure out inexpensive ways to turn other biomass into ethanol, then the new fuel could create an environmentally friendlier alternative to fossil fuels. The new RFS would cap corn-based ethanol incentives at 15 billion gallons by 2015 – the remaining 21 billion gallons would be "advanced biofuels," primarily ethanol made from switch grass and other materials.

"It all depends on how you make it," says Nathanael Greene, a biofuels analyst at the Natural Resources Defense Council in New York. "We need tough performance standards in this bill – and I think we have a good chance of getting them."

Right now, he says, the primary RFS requirement is a 20 percent reduction in greenhouse emissions – not enough to curb climate change very much. But congressional leaders are said to be considering a required 50 percent cut in greenhouse emissions.

Such a reduction would not come cheaply. Already, the federal government pays 51 cents to oil companies for every gallon of ethanol they blend into gasoline at a cost of about $6 billion annually, according to a new study by Earth Track, a Boston-based energy-consulting firm. That cost will rise to $14 billion by 2014 under current law, the study says. With the new RFS, those costs would leap "tens of billions per year above these levels."

Industry experts dispute those amounts but say such a subsidy is necessary to unhook the US from imported oil. "If you compare the ethanol subsidy with current transportation and oil system subsidies it pales by comparison," says Mr. Koehler.

To get the energy bill passed, congressional leaders are trying to craft a bill attractive enough to farm-state Republicans to avoid a filibuster and perhaps override a presidential veto – while not losing support from those worried that ethanol is too costly given its limited environmental and energy security gains.

Despite its detractors, the political momentum of the biofuels provision may hold sway, some observers say.

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