| In his 2006 State of the Union, President Bush argued for the need to end America's oil addiction and announced that biofuels were a way to accomplish that goal. One year later, the President addressed the nation again, pledging that America would produce 35 billion gallons of renewable and alternative fuels by 2017, accelerating by eight years his earlier commitment to reduce Middle East oil imports. Most of the declared presidential candidates have announced support for biofuels, and we can expect all of them vigorously to reaffirm this position in the upcoming Iowa caucuses. State-level interest is no less avid than federal: Governors in five of the six states in our region included new biofuel initiatives in this year's state of the state addresses, and many legislatures have passed incentives, sweetening an already sweet Federal pot. What's not to like about biofuels? Proponents claim that biofuels will make America more energy independent, reduce global warming pollution and improve the economy. But are these supportable claims and to what extent? Let us examine them in turn.
Energy Security
Environmental Impacts
Economic Impacts
Energy Security:
There is little dispute that ethanol and biodiesel as currently produced will have only a minor effect on US petroleum dependence. If all of the corn produced in the US were converted to ethanol, it would account for about 10 percent the nation's gasoline use. One author points out that current ethanol production is roughly equal to the savings that result if all of the nation's tires were properly inflated. Likewise, if all of the soybeans produced were converted to biodiesel, it would replace about 7 percent of the nation's petroleum based diesel. Claims that biofuels are a path to energy independence cannot be sustained.
Environmental Impacts:
Studies vary as to their conclusions about greenhouse gas emissions. A sampling of recent analyses suggests that net emissions from corn ethanol ranges from 20 percent more to 20 percent less than gasoline. The range for soy biodiesel is even larger--from 50 percent more to 50 percent less than conventional diesel. A number of factors account for this variation, but the most important ones are likely to be how land use emissions are accounted for and how emissions are allocated to coproducts. A Berkeley scientist recently advised the California Air Resources Board that the present quality of analysis leaves the question of greenhouse gas benefits unresolved. In addition to the uncertainty of greenhouse gas benefits, we should not forget the broader environmental effects of conventional row-crop agriculture--topsoil erosion, water pollution, and loss of biodiversity. Land now enrolled in various conservation set aside programs could be removed produce more corn and soybeans, with potentially significant environmental downside.
Economic Impacts:
The economic impact of biofuels is a mixed bag.
Higher commodity prices are good for the farmers that grow corn and soybeans. However, higher prices drive up land values and this puts pressure on other sectors of the agricultural economy. As reported in numerous recent articles, livestock farmers are already feeling the pinch of dramatically higher feed prices.
Both ethanol and biodiesel are heavily subsidized and cannot compete with oil--even at current prices--without these subsidies. Yet commodity subsidies are being phased out under various trade agreements, and agricultural fuel subsidies could well be challenged in international courts. Are we building an industry that will crumble without price supports?
In some places farmers themselves are investing in local biofuel plants on the assumption that they will be profitable in the long run. If the biofuel bubble bursts--as did the independent power bubble a few year back--can these farmers survive the loss of capital?
The economic impact on global food markets may be the most worrisome economic fallout of the biofuels rush. A May 2007 Foreign Affairs article says:
"The enormous volume of corn required by the ethanol industry is sending shock waves through the food system...This might sound like nirvana to corn producers, but it is hardly that for consumers, especially in poor developing countries..."
This assessment of the three principal arguments for conventional biofuel raises doubts about the wisdom of our current state and federal policies. Are there more hopeful paths for producing biofuels?
Alternatives to Corn Ethanol and Soy Biodiesel
Much attention has been given to the possibility of producing fuels from a wider range of plant material than corn and soybeans. Native prairie grass, wood chips, and even yard waste could be converted to ethanol if the so-called cellulosic technology pans out. And if it does, this may be a better biofuels bet.
On energy independence, the most optimistic estimate claims that if all the available plant material were converted to ethanol, this could replace about half of our current gasoline consumption. If true, this would take a big bite out of our foreign oil tab and bring the nation closer to energy self sufficiency. But there are good reasons to question the feasibility of the estimate. First, the number was produced by a leading celluloisc ethanol developer, who clearly has a stake in the outcome. Second, the feedstock material comes from a wide array of sources, and the job of collecting and treating such an array is problematic. Finally, some of this plant material is now plowed back into farm fields to enhance fertility, and in many cases is the only organic matter regularly returned to the soil. More conservative estimates peg the potential contribution from cellulosic ethanol at 10-20 percent of current gasoline use. There are also serious technical challenges. We have yet to develop an efficient way of pre-treating the feedstocks to make the cellulose available for fermentation. And, we still have not mastered production of the chemical cocktails needed to drive the fermentation. On the environmental front, preliminary analyses of the greenhouse gas balances of cellulosic alternatives are much more favorable, ranging from 60-100 percent less than gasoline. And, depending upon the feedstock, the environmental consequences of growing and harvesting are more benign than industrial agriculture. Indeed, some of the most attractive feedstocks are waste products that now present a disposal problem for producers. Although it is too early to say whether the process itself will ever be economic, we can say with certainty that the feedstocks will be far cheaper than corn or soybeans. Cellulosic ethanol, then, is more promising from an environmental standpoint, but still has some significant hurdles to get over before we know about the economics and technical feasibility. Biomass can also be gasified, either by itself or along with coal, to produce liquid transportation fuel. Coal-to-liquids plants are increasingly popular, but they are potentially big greenhouse gas emitters; if coal and biomass are gasified together and the carbon dioxide captured and stored, the resulting product has lower global warming emissions than conventional fuel. This may the most promising avenue for biofuel development--and it will offer a way to tap our vast coal reserves, a critical resource for energy independence, without busting the carbon budget. The technology to make this happen is available and commercially demonstrated.
No Silver Bullets
Improving American energy security, reducing global warming, and promoting economic growth are complex, intertwined issues. Biofuels are part (and a very complex part) of a wide array of means to address these problems. Assembling and investing in the most effective mix is the signal challenge of our age; looking for silver bullets that solve all problems at once wastes time that we do not have. The sooner we recognize this complexity and get started, the better.
Stephen Brick is the Program Manager for the Joyce Foundation's Environment Program.
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