In a June post I provided a brief tutorial on the concept of lifecycle CO2 estimation and pointed to its problematic fate in the regulatory and political arena. That point has now gained increased salience with the completion of peer review, conducted by an EPA-appointed panel, of the agency’s proposed approach to measuring lifecycle carbon dioxide (and CO2-equivalent) emissions in the production and use of “biofuels.” And while the EPA review can only go so far toward determining the total economic cost of biofuels, CO2 measurement is certainly one important element in that cost.
Although the scope of biofuels is broad—encompassing feedstocks derived, e.g., from plants, trees, and the organic content of waste materials—the political spotlight is sharply turned on ethanol and, more particularly, corn-based ethanol, whose current annual output is approximately 9 billion gallons. A 2007 legislative requirement calls for production of 36 billion gallons of ethanol—21 billion gallons of which are required to be from non-corn sources—by the year 2022. That mandate further requires evidence of how lifecycle emissions from ethanol compare with those released by an energy-equivalent volume of conventional liquid fuels.
Understandably, it is the U.S. farm sector and its legislative representatives that are most concerned with the possibility that, depending on the estimated lifecycle CO2 measurement, ethanol would lose some or much of its appeal as a CO2-neutral energy source. In that context, keep in mind that ethanol continues to be federally-subsidized with a 51-cent/gallon tax credit; while the threat to the industry’s viability arising from foreign competition remains checked by a roughly equal amount imposed on imported ethanol, mostly in the form of Brazilian sugar-based fuel.
Since, as noted, the mandated increase in ethanol output is predicated on an assumed lifecycle CO2 profile superior to that of fossil-based liquids, the final EPA rule on the matter could be critical to the industry’s future. In an extreme policy implication, it could conceivably pose the dilemma of whether worse-than-expected greenhouse gas implications could trump whatever the national benefits of continued federal support via subsidies and import protection.
Therefore, look for extended and intense discourse—both analytical and political—as the momentum toward adoption of binding rules moves ahead. And points which I merely flagged—or avoided getting into at all—in my previous post will, almost surely, be scrutinized closely.
Questions of the applicable time horizon needed for an agreed-upon basis of comparison among fossil and renewable fuels—30 years? 100 years?—will join issues of discount rates, geographic reach, and no doubt other contentious matters before some sort of consensus consistent with analytical integrity, on the one hand, and acceptability by various stakeholder groups, on the other, emerges.
In short, stay tuned. The heat generated by the ethanol debate may not match that produced by the greenhouse effect. But it’ll be a mind-concentrating phenomenon of its own.
For more, see the EPA fact sheet, “EPA Lifecycle Analysis of Greenhouse Gas Emissions from Renewable Fuels,” EPA-420-F-09-024, May 2009.
Joel Darmstadter is a senior fellow at Resources for the Future. Since joining RFF in 1966, his research has centered on energy resources and policy.