Last week was a big week for the ethanol industry. The federal government agencies charged with supporting and regulating the use of ethanol in the U.S., namely the U.S. DOE, the USDA and the U.S. EPA, made separate announcements which appear to be continuing their on-again, off-again relationship with ethanol, leaving producers to wonder what level of support they should anticipate in 2010.

The EPA made its expected announcement on Dec. 1 that it is delaying its final E15 rule until sometime next year. This surprised no one. However, despite the agency's dragging its feet, the ethanol industry continues to be optimistic that the EPA will ultimately conclude E15 is allowable and beneficial to the U.S. as a transportation fuel. It was disappointing that the EPA did not announce an interim E12 waiver, and this was reflected in several of the comments that rolled into my inbox following the announcement. Of all the comments I received in response to the EPA's announcement, the only pro-EPA statement came from the Union of Concerned Scientists, who continue to assert that increased ethanol percentages could increase tailpipe pollution or damage older vehicles. Keep in mind this is the same organization that wants to blame U.S. corn growers and ethanol for rainforest destruction in the Phillippines. Where there's a negative angle, they will find it.

On Friday, the DOE and USDA jointly announced a massive investment in "advanced biorefinery projects." Nearly $600 million was awarded to 19 companies; nearly all of them are working on ethanol projects. Awardees included Bluefire Ethanol LLC, INEOS New Planet BioEnergy LLC, Enerkem Corp., ZeaChem Inc., Logos Technologies, ICM Inc., ADM, American Process Inc., and Algenol Biofuels Inc. While this is fantastic news for the industry and those companies, it was followed by another funding announcement made by the DOE today that it is also providing $100 million for research on electrofuels - drop-in fuels that are made without the use of petroleum or biomass.

Is the DOE abandoning biofuels, or simply diversifying its fuel portfolio? Secretary Chu has stated numerous times that he is not a fan of corn ethanol and that the agency will focus on advanced technologies to provide fuel for domestic use. Many, if not all, of the companies included in Friday's announcement are working on producing drop-in fuels as well as ethanol. That could be one of the reasons why the DOE chose to provide funding for those projects. Government support is essential to advancing U.S. alternative fuel production and if the DOE is changing its area of emphasis, producers need to know.