Environmental Law

Biofuels: Feds Release New Plan, U.N. Raises Food Concerns

By Dennis Pfaff and Kevin Livingston, Editors

U.S. government officials Tuesday released a new "action plan" for developing a sustainable biofuels industry, including a heavy emphasis on coming up with non-food sources of the energy supply.

The document emerged at the same time that the United Nations Food and Agriculture Organization released its own cautionary assessment, warning that the increasing global demand for biofuels is putting pressure on food prices and may not do much to reduce greenhouse gas emissions. At the same time, however, the report said biofuels could present opportunities for agriculture and rural development.

In releasing the federal plan, U.S. Energy Secretary Samuel Bodman said the program pointed the way toward meeting an objective set by President Bush in 2007 to cut gasoline use by 20 percent over the coming years.  In a statement, Bodman said: 

“The National Biofuels Action Plan is a strategic blueprint that shows us the way to meet the President’s goal of meaningful biofuels production by the year 2022. And to do it in cost-effective, environmentally-responsible ways that utilize a science-based approach to ensure the next generation of biofuels that are made primarily from feedstocks outside the food supply that are produced sustainably.”

The new plan was developed by the Biomass Research and Development Board, a multi-agency body led by officials from the U.S. Department of Energy and the U.S. Department of Agriculture. The plan addresses a number of areas, including the production of feedstocks, such as corn, crop residues and other materials used to make biofuels; converting the raw materials into liquid fuels and supporting the sustainability of biofuels.

On that latter point, the report said that the board by next month is expected to issue a set of "science-based national criteria" to assess the sustainable production of biofuels. The document also said that while there has been progress made on developing "cellulosic" ethanol, produced from materials such as grasses and wood chips, production costs are still too high for such fuels to compete in the market. It outlined a number of research steps that need to be taken to overcome the obstacles.

The cellulosic ethanol industry also seems to have gained some momentum recently.  In a separate statement Tuesday, Bodman announced his department was taking several additional steps, including putting more money into cellulosic refineries.

In the document, officials also conceded that the existing market for ethanol-blend motor fuel would likely be saturated "in the next few years." However, under a federal law signed last year, the Energy Independence and Security Act (see also an administration fact sheet), 36 billion gallons of ethanol are to be produced by 2022 (up from an estimated 9 billion gallons for this year). To handle the additional volume, the plan said one option would be increasing the amount of ethanol that could be blended into gasoline beyond the current 10 percent limit, although that would first require understanding how the new mix would affect performance, emissions and other factors.

A primary worry about biofuels has been their suspected contribution to higher food and fodder prices, as crops such as corn are diverted to fuel production. This summer, for instance, that connection was raised by Texas in its unsuccessful bid to get federal officials to lower the amount of ethanol required in the nation's motor fuel mix. 

The ethanol industry has long disputed that biofuels are a primary cause of food price inflation. 

The food vs. fuel conundrum was a central feature of the U.N. report. Wrote Jacques Diouf, the head of the agency producing the document, in a forward to the report: 

"There is also an urgent need to review current policies supporting, subsidizing and mandating biofuel production and use. A large share of the recent growth in biofuels has been driven by such policies, especially in [developed] countries. Many of the assumptions underlying these policies regarding beneficial impacts on climate change and energy security are now being questioned, and unintended consequences of rising food prices for poor consumers are being recognized."  

Biofuels will "offset only a modest share of fossil energy use over the next decade," Diouf wrote. He also noted that the report found that the impact on greenhouse gas emissions could vary widely:

"In many cases, increased emissions from land-use change are likely to offset or even exceed the greenhouse gas savings obtained by replacing fossil fuels with biofuels, and impacts on water, soil and biodiversity are also a concern." 

At the same time, he wrote that "given appropriate policies and investments," higher prices could boost agricultural production and employment, "which could contribute to poverty alleviation and improved food security over the longer term." The report itself also noted that biofuels are "only one of many factors" driving up commodity prices.

--Dennis Pfaff of Thelen LLP

Photo credit: Harvesting corn and and stalks and husks that could be turned into ethanol. Courtesy U.S. Department of Energy-National Renewable Energy Laboratory. Credit: Warren Gretz

Full post as published by Climate Law Update on October 07, 2008 (boomark / email).