IEA Lowers U.S. Biofuel Production Forecast

The outlook for ethanol production growth in the U.S. is dimmed because of the growing debate on whether the country should abandon or revise the biofuels policy, the International Energy Agency said today.

Last year’s drought, which damaged corn crops and raised costs for livestock farmers, provided fodder for those who oppose the Renewable Fuels Standard, or RFS2, which calls for the U.S. to use escalating amounts of biofuels in petroleum. The mandate is also under attack from petroleum industry advocates who say stagnant gasoline demand makes the law unworkable, the IEA said in its Medium-Term Oil Market Report.