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    New Bill Proposes Adding Gas-Based Ethanol to Renewable Fuel Standard

    One company believes it can produce the alternative fuel for $1.50 per gallon.

    WASHINGTON, D.C. -- More than a dozen politicians have co-sponsored legislation that would allow ethanol produced from natural gas to compete with corn-based ethanol under the Renewable Fuel Standard (RFS), which requires refiners to use 13.8 billion gallons of ethanol this year and 15 billion by 2015. Ethanol is typically combined with gasoline in a formula of up to 10 percent, which is referred to as the blend wall.

    According to the Houston Chronicle, if the bill is adopted, it would create a "domestic alternative fuel" category in the RFS, under which the natural gas-based product would qualify.

    The legislation is sponsored by U.S. Reps. Pete Olson (R-Texas) and Jim Costa (D-Calif.), as well as several other politicians. Olson believes the idea holds plenty of merit because the RFS aims to reduce the United States' need for foreign oil, and natural-gas based ethanol is chemically identical to its corn-based counterpart.

    "Expanding the sources of ethanol will only benefit Americans," the Texas Republican said in a statement.

    In addition, the Congressman added that including natural-gas ethanol under the RFS would spur investment and guarantee a market for the product.

    Dallas-based Celanese Corp. is one of a handful of companies that has mastered techniques to produce ethanol from natural gas. The company told the newspaper it can create natural-gas based ethanol at a cost of $1.50 per gallon by putting hydrocarbons through a thermochemical process.

    Not everyone supports the idea, however. Critics believe adding natural gas-based ethanol would defy the intent of the RFS, which is to support renewable non-fossil-fuel alternatives. Natural gas is technically a fossil fuel and of finite supply, the Chronicle reported.

    In the past, the Renewable Fuels Association stated that it believes no fossil fuels should be added to the RFS. But the trade organization has not yet released a specific statement to rebut the Congressional bill.

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