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Renewable Fuel Standard 2.0

By Scott Sklar, President, The Stella Group
November 5, 2009 | 10 Comments

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I have heard that some people are worried that renewable fuel standards or low-carbon fuel standards or simple market forces favoring biofuels will "cause people to rip up sustainable soybean fields and turn them into big switchgrass plantations." And that EPA is proposing elaborate new laws saying that farmers and foresters cannot grow biofuel crops on land previously used for other purposes. Is this true and what do you think about all that? – Lisa N., Wilton, CT

The RFS already has such delineation and the recently proposed RFS2 goes further.

The U.S. Environmental Protection Agency (EPA) announced in Feb 2008 that it is raising the renewable fuel standard (RFS) for 2008 to comply with the Energy Independence and Security Act, which President Bush signed in December 2007. The RFS requirement will continue to ratchet up each year until it reaches 36 billion gallons in 2022, of which 11 billion gallons must come from cellulosic, non-food ethanol.

In Oct 2009, the Government Accountability Office (GAO) said that to meet the RFS, domestic biofuels production must increase significantly to achieve the RFS's 36-billion-gallon requirement in 2022.

To address these concerns, GAO has proposed amendments to the RFS, known as the RFS2.

RFS2 would:

require a significant expansion of the escalating volumes of renewable fuels required each year (to reach 36 billion gallons by 2022);
divide the volume requirements into four categories of renewable fuels (“conventional biofuel,” “advanced biofuel,” “biomass-based diesel,” and “cellulosic biofuel”);
require that each of these mandated volumes of renewable fuels achieve certain minimum thresholds of greenhouse gas (GHG) emission performance;
significantly change the definition of renewable fuels;
expand the types of fuels subject to the standards to include diesel and certain nonroad fuels;
and include specific types of waivers and EPA-generated credits for cellulosic biofuels.

The proposed RFS2 program would increase the cellulosic biofuel mandate from 250 million to one billion gallons by 2013, with additional yearly increases to 16 billion gallons by 2022.

The GHG targets for renewable fuels call for a 20 percent reduction of GHG emissions relative to petroleum fuels for general renewable fuels, a 50 percent GHG reduction target for advanced biofuels and biomass-based diesel, and a 60 percent target for cellulosic ethanol.

All biofuel facilities that were built or under construction before December 19, 2007, are grandfathered in and will not be required to meet the minimum 20 percent GHG threshold. Biodiesel produced in that category would be added to corn ethanol production to meet the 15 billion gallon RFS for conventional biofuels in 2015 and beyond.

I support the EPA proposals in general, but I have some concerns. First, the RFS should embrace all types of liquid and gas biofuels used for transportation as long as they meet environmental compliance, which include all the alcohols such as butanol, and also dimethyl ethers, and biogas.

I am adamantly against the rules on consequences of land substitution for the biofuels industry unless they are universally applied to other industries such as mining, waste storage, residential sprawl construction and even parking lots. Our society and environment tolerate intense emissions, including greenhouse gases, from these “land switchovers” that far exceed biofuels in many cases.

Bioenergy

The information and views expressed in this article are those of the author and not necessarily those of RenewableEnergyWorld.com or the companies that advertise on its Web site and other publications.

10 Reader Comments

Comment
1 of 10

ronald-steenblik-74298

November 6, 2009

"I am adamantly against the rules on consequences of land substitution for the biofuels industry unless they are universally applied to other industries such as mining, waste storage, residential sprawl construction and even parking lots."

You are missing an important point, Mr. Sklar: the law does not forbid a biofuels producer from selling his or her product even if it leads to net increases in global greenhouse gases due to land-use change (direct or indirect). What it does is say that only those biofuels that meet the criteria can count against the "targets" (actually, minimum quotas) and benefit from tax credits. Naturally, the price received by compliant biofuels will normally be higher than those for non-compliant biofuels, but if the price of petroleum stays high, there is nothing in the law to prevent a manufacturer of a biofuel simply selling that biofuel at petroleum-price parity.

How much mining, waste storage, residential sprawl construction and even parking lots that are built are mandated or subsidized by government? Indeed, most forms of mining now have to post bonds guaranteeing that the land they disturb will be restored after mining ceases. Most new landfills have to do something about their methane emissions. Sprawl is the result often of government INACTION, not subsidies, except for roads (and in that case, I agree that consideration should be given to land-use effects).

Comment
2 of 10

Joanne

November 6, 2009

Ronald, I don't know about your town, but here we regularly give tax incentives to companies to take land out of agriculture and put it into industrial parks--with LOTS of pavement for parking lots and sprawling above-ground commercial and industrial buildings.
That said, the advanced biofuels-related tax incentives are to encourage investment in use of sustainably grown energy crops, ag and forest waste and residues, food production residues so that we can get off foreign fossil fuels without doing more harm to the earth. Because the social values outweigh financial ROI for new, untried, innovative technologies, there has to be some government investment. Recall the Manhattan Project, the Apollo Project. These are necessary because the private investement isn't there. We know how to ferment sugars and starches. We don't yet know how to reliably and economically convert cellulose, hemicellulose, pectin and lignin productively into biocrude. You are very welcome and encouraged to put your private funds into these projects as many are doing; but don't expect a significant ROI any time soon. Hopefully, your contributions to a young industry will be handsomely rewarded in the future. If you decide not to put your money where your mouth is, then you understand why we need government funding.

Comment
3 of 10

ronald-steenblik-74298

November 6, 2009

Joanne. Fair point about the tax incentives given for industrial parks. Indeed, I even oversaw a study on such investment incentives:

www.globalsubsidies.org/en/research/investment-incentives

But, to put perhaps a fine point on it, those are locally determined. We are here talking about consistency among federal policies.

Strange that you should invoke the Manhattan Project,, which was purely about national defense (not only winning the World War but sending a signal to the Soviets) and the Apollo Project, which was about national prestige. In neither case was there much consideration of cost-effectiveness. "We need to be first with the bomb, period. Now do it. Here's your blank check." and "We need to be the first to put a man on the moon. It better happen. Here's your blank check."

In the case of reducing fossil-fuel use, there are many more alternatives, and it is irresponsible for people to think that the government should just write a blank check.

The fact that we don't yet know how to reliably and economically (and let's not forget "in an environmentally benign way") convert cellulose, hemicellulose, pectin and lignin productively into biocrude should be an argument for caution and for expenditure on R&D, not for already setting mandates for the stuff and creating a subsidy of $1.50 per gallon of gasoline equivalent. As economists at Cornell University have shown, subsidizing the production of biofuels AND mandating their consumption actually could lead to reducing the price of blended fuel enough that the net effect on consumption is to INCREASE consumption of petroleum.

The details and the parameters of policies are what matter. You call for subsidies; I call for a carbon tax. They may sound equivalent, but they are not.

And, no thank you, I'd rather invest my money in companies that build bicycles, rapid transit, technologies for improving the efficiency of vehicles, etc., etc. Unlike a rocket to get to the moon, biofuels are not "the only answer".

Comment
4 of 10

russ-finley-53703

November 6, 2009

Scott said:

"..I am adamantly against the rules on consequences of land substitution…Our society and environment tolerate intense emissions, including greenhouse gases, from these "land switchovers" that far exceed biofuels in many cases.."

Can you tell us what these things are that "far exceed biofuels" per unit energy when it comes to land "switchovers?"

You would allow the destruction of natural carbon sinks and all of the attendant GHG release for biofuel feedstock just because other industries are not presently being held accountable for it. I would think it better to hold at least one industry liable than none, especially one that relies on hundreds of thousands of square miles of land. And it would make sense that we should have legislation that includes land change in the footprint of all industry as well.

You make this argument because you think that if land use changes were part of oil carbon accounting it would help make biofuels more competitive but it wouldn't. Compared to agriculture, oil production (liquid biofuel's competitor in the market) simply is not nearly as land intensive per unit energy, not by a few orders of magnitude. Even Canadian tar sand mining, which IMHO should not be allowed, usurps very little carbon sink per gallon of energy produced compared to growing fuel on cropland.

As for Lisa's concern that "market forces favoring biofuels will cause people to rip up sustainable soybean fields and turn them into big switchgrass plantations," here is an honest recent remark from a corn farmer in Nebraska:

"..The food versus fuel argument is, you know, not my decision," Jeff Shaner told us. "It is the market decision. If in five years the market is telling me to go with switchgrass, we'll go with switchgrass. ... Whether if be corn or soybeans or whatever the case may be, I just hope I am flexible enough to realize it and change what needs to be done in order to be successful.."

He will grow grass if it is more profitable.

Comment
5 of 10

russ-finley-53703

November 6, 2009

joanne,

Do you agree that government can make mistakes? Was the Vietnam war a smart move (or going to the moon for that matter)? Are you against the scientific method and science-based critique, or should we leave the decisions entirely up to our politicians and their corporate lobbyists?

Sometimes it pays to try to put things into perspective. How much exactly, to within three decimal places is "LOTS?" What percentage of the 25 thousand square miles of land devoted to corn ethanol in the last two years would those parking lots be?

Why do you allow your local government to convert farmland into industrial parks and how would allowing biofuels to destroy carbon sinks improve on that situation?

You said

".. advanced biofuels-related tax incentives are to encourage investment in use of sustainably grown energy crops, ag and forest waste and residues, food production residues.."

But, if we don't let science define what is sustainable, the lobbyists will continue to do so. And continuing to do that will keep us taking two steps back for every step forward, as is the case with corn ethanol:

"..The leftover plant material — also called corn stover — is being bought by some energy companies. They turn it into pellets and sell it to coal-fired power plants. Some companies will pay up to $20 a ton for long-term contracts. At an average of 3 tons per acre, a mere 100-acre field could yield a gross profit of $6,000.

But University of Nebraska-Lincoln farm experts say that residue is even more valuable to the farmer by adding nutrients and lending structure to the soil. Experts say the nutrient value of corn residue ranges from $17 a ton to $46 a ton. Without that residue, the farmer will have to add more fertilizer, raising input costs.."

Source:

http://www.google.com/hostednews/ap/article/ALeqM5i7vUtLGiDHp6gRom-AZMaRObyzTAD9BK80F00

Comment
6 of 10

russ-finley-53703

November 6, 2009

And finally, sometimes is pays to step back and look at the big picture. A recent article in Nature tried to convey the magnitude of what we have done to the biosphere, and increased "industrialized forms of agriculture" for food or fuel is not part of the solution:

"..Now, largely because of a rapidly growing reliance on fossil fuels and "industrialized forms of agriculture," human activities have reached a level that could damage the systems that keep Earth in the desirable Holocene state.."

Source:

http://biodiversivist.blogspot.com/2009/10/transgressing-identified-and-quantified.html

Comment
7 of 10

charles-scouten-63970

November 6, 2009

The question that initiated this discussion contains the term, "sustainable soybean fields" - don't think I have ever seen such a field. All soybean fields I see get fertilizer, herbicide, and eventually defoliant. Not self-sustaining at all. Does sustainable mean you can keep farming if you pour in enough fossil fuel derived products? Or what?

Comment
8 of 10

Anonymous

November 7, 2009

I have to agree with some of the other reader comments--large subsidies and steadily increasing mandates for biofuels that we don't yet know how to produce economically or without disrupting the food supply are poor policy. We would have a much better chance of achieving useful new technologies if we funded R&D rather than subsidizing schemes that may never be viable on their own. Unfortunately, science and economics seem to have little influence on federal policy these days....
Steven

Comment
9 of 10

Anonymous

November 7, 2009

We must wake up to the fact that lobbiests and the Federal Reserve bank and the military industrial establishment are parasites on the economic systems of a so called developed country. When a country's prime directives are of an economic nature, pirates will rule it's policy.

Comment
10 of 10

thomas-j-setter-70204

November 25, 2009

Do you have any follow up on your TANZANIAN PROJECTS???
Great work.

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Scott Sklar

About: Scott, founder and president of The Stella Group, Ltd., in Washington, DC, is the Chair of the Steering Committee of the Sustainable Energy Coalition and serves... more »