Federal biofuel mandate flawed, report finds

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A National Research Council report Tuesday said a federal requirement to add some 16 billion gallons of cellulose-based ethanol to the nation’s fuel supply by 2022 won’t be met unless innovative technologies are developed or policies changed.

The report also calls into question the ecologic and economic calculations behind Congress’ backing of commodity-crop ethanol (mainly corn), particularly if production involves clearing land to grow crops dedicated to fuel.

In 2005, Congress enacted the Renewable Fuel Standard, as part of the Energy Policy Act and amended it in the 2007 Energy Independence and Security Act.

The amended standard, known as RSF2, mandated that by 2022 the consumption volume of the renewable fuels should consist of:

15 billion gallons of conventional biofuels, mainly corn-grain ethanol;

16 billion gallons of cellulosic biofuels produced from wood, grasses, or non-edible plant parts, such as from corn stalks and wheat straw.

4 billion gallons of advanced renewable biofuels, other than ethanol derived from cornstarch, that achieve a life-cycle greenhouse gas threshold of at least 50%.

1 billion gallons of biomass-based diesel fuel.

The mandate is supported by subsidies to biofuel producers. Last year, the U.S. produced 13.2 billion gallons of corn-based ethanol and 311 million gallons of biodiesel, which should make it easy to meet those targets by 2022, according to the report.

Not surprisingly, the tightly niched alt-fuel industry had varied reactions to the report. Biodiesel producers highlighted findings that suggest the biodiesel mandate can be met adequately. But they begged to differ on the issue of the carbon footprint of such production, a position shared with the corn-ethanol producers:

‘Regarding greenhouse gases, the report again makes clear that there are significant uncertainties surrounding the hypothetical modeling used to calculate indirect land-use change for biofuels,’ the National Biodiesel Board said in a statement.

Biofuel producers have been arguing themselves blue over how to calculate the carbon footprint of various fuels and how to compare them. The thorniest issue surrounds land use effects -- clearing land, turning up soil, converting one form of carbon-storing vegetation to another and the like. Most prefer to let their product shine next to fossil fuels, whose carbon footprint is enormous:

‘We believe the evidence demonstrates that biodiesel compares very favorably when compared to petroleum, as the EPA found in its most recent analysis, which shows that biodiesel reduces greenhouse gas emissions by 57 percent to 86 percent, depending on the feedstock used,’ the National Biodiesel Board said.

But here’s what the report said about the greenhouse gas (GHG) implications of ‘growing’ certain fuels:

‘If the expanded production involves removing perennial vegetation on a piece of land and replacing it with an annual commodity crop, then the land-use change would incur a one-time GHG emission from biomass and soil that could be large enough to offset GHG benefits gained by displacing petroleum-based fuels with biofuels over subsequent years. Furthermore, such land conversion may disrupt any future potential for storing carbon in biomass and soil.

‘In contrast,’ the report noted, ‘planting perennial bioenergy crops in place of annual crops could potentially enhance carbon storage in that site.’

The main irritant to corn-ethanol proponents involves how models calculate world market reaction to increased use of cash crops for fuel production. Corn ethanol producers complain they shouldn’t be held accountable for a decision by, say, Brazil to cut rain forest to produce fuel crops.

‘Indirect land-use change occurs if land used for production of biofuel feedstocks causes new land-use changes elsewhere through market-mediated effects,’ the report says. ‘The production of biofuel feedstocks can constrain the supply of commodity crops and raise prices. If agricultural growers anywhere in the world respond to the market signals (higher commodity prices) by expanding production of the displaced commodity crop, indirect land-use change occurs. This process might ultimately lead to conversion of noncropland (such as forests or grassland) to cropland. Because agricultural markets are intertwined globally, production of bioenergy feedstock in the United States will result in land-use and land-cover changes somewhere in the world, but the extent of those changes and their net effects on GHG emissions are uncertain.’

No biofuel will be economically viable by itself, the report says, unless the price of fossil fuels remains high and unless there is a market price for carbon. A price for producing or offsetting carbon emissions would come from policies such as a cap-and-trade regime, which is dead in Congress, or a carbon tax, which has been a non-starter.

‘Only in an economic environment characterized by high oil prices, technological breakthroughs, and a high implicit or actual carbon price would biofuels be cost-competitive with petroleum-based fuels,’ the report found.

It would take an oil price of $191 a barrel, or a price of $118to $138 a ton of carbon and an oil price of $111 a barrel to close the gap between what biofuel distilleries are willing to pay and what growers are willing to accept, the report found.

As for making cellulose-based ethanol from switchgrass, wood and nonedible plants, the report blames ‘policy uncertainty and high cost of production,’ which is keeping investors from making the kind of commitment that would be necessary to jump-start the cellulose-ethanol industry.

There are no commercially viable refineries producing cellulose ethanol in the U.S., according to the report.

Cellulose-based biofuel doesn’t get a free ride on the carbon calculator, either. The report found that more land will need to be cleared to meet the goal of producing more of that fuel.

‘Absent major increases in agricultural yields and improvement in the efficiency of converting biomass to fuels, additional cropland will be required for cellulosic feedstock production; thus, implementation of [renewable fuel standard two] is expected to create competition among different land uses, raise cropland prices, and increase the cost of food and feed production.’

Use of corn, soybeans and other commodity crops already has been blamed for increased food prices, the report notes.

The study was sponsored by the U.S. Department of Agriculture, U.S. Department of Energy and U.S. Environmental Protection Agency. The National Research Council is part of the National Academies.

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-- Geoff Mohan