Biofuel Producers Unlikely To Meet Even Half Of Bush Targets - Dow Jones

HOUSTON (Dow Jones)--Leading producers of ethanol and biodiesel Friday said their industries faced serious barriers to meeting the 2017 growth targets outlined this week by President George W. Bush to reduce dependency on gasoline. "The current solutions won't get you there," Jeff Trucksess, executive vice president of Green Earth Fuels LLC, a biodiesel developer, told an industry gathering here Friday morning.

Following up on prior pledges on energy policy, Bush Monday outlined additional measures to boost alternative energy development, limit gasoline consumption and comply with a recent Supreme Court ruling on global warming. Bush's plan included a goal to produce 35 billion gallons of renewable and alternative fuel by 2017, many times above current levels. A Bush administration official Friday defended the viability of the president's goals, but the discussion at the Houston event underscores the magnitude of the challenge facing the U.S. as it struggles to feed its growing energy needs in an increasingly carbon-limited world.

"I've yet to meet anyone who thinks more than half could be from ethanol and biodiesel," Pearce Hammond, an analyst at Simmons & Co. International, said of the targets. He said total production of ethanol and biodiesel could reach 17.5 million gallons by 2017. Hammond said there could be other solutions to the conundrum, such as coal-to-liquids technology or the use of natural gas as a transportation fuel. But Hammond, who emceed some of the sessions Friday, also warned that U.S. gasoline demand is forecast to grow by some 35 million gallons a day over the next decade. "It just touches on how big the challenge is to penetrate and change the fueling habits," he said.

Friday's event was heavily attended by finance and energy professionals, underscoring the growing interest in alternative energy in Houston. The gathering was sponsored by the law firm Haynes & Boone. Speaking with reporters after a luncheon address, Paul Dickerson, an Energy Department official, said the administration's goal is realistic. He pointed to other fuels under development, as well as to leading-edge technologies being funded chiefly by private-venture capital. "We're more bullish on the output than some of the folks here," said Dickerson, the chief operating officer for the department's Office of Energy Efficiency and Renewable Energy.

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