U.S. Awards $385 Million for Ethanol Development

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The U.S. government awarded $385 million in grants last week aimed at jumpstarting ethanol production from nontraditional sources like wood chips, switchgrass and citrus peels, the Associated Press reported.Three of the six projects chosen will use a process first discovered almost a century ago to turn coal into a gas, AP said. Ethanol is an additive generally making up about 10% of gasoline supply.Meanwhile, the Bush administration's decision to team with Brazil on the promotion of ethanol is a “mind boggling'' move that could undermine U.S. farmers, Sen. John Thune (R-S.D.) said Saturday, AP reported.Most U.S. ethanol is made from farm products, primarily corn, while Brazil makes it mostly from sugarcane.President Bush, heading to Latin America this week, is expected to sign an agreement to share scientific and technological research with Brazil for an industry that has grown in both countries.The president set a goal in his State of the Union address of producing 20% of the nation’s fuel supply from renewable resources by 2017. Much of those supplies will come from the conversion of corn into ethanol, fueled by a boom in new ethanol plant construction that’s already under way.