Catching up on its annual requirements for biofuels, the US Environmental Protection Agency offered a reminder for why the country has a Renewable Fuel Standard (RFS). "Congress developed the renewable fuels program in an effort to reduce greenhouse gas emissions and expand the nation's renewable fuels sector while reducing reliance on foreign oil," it said. "Biofuels are an important component in the administration's effort to enhance energy security and address climate change." For a program faring poorly, rationale is important.
The agency pleased few with its proposed volume targets for biofuel sales in 2014, 2015, and 2016. Biofuel promoters faulted it for using authority to set requirements below rising statutory levels to accommodate market reality. Refiners argued the standards remain too high.
The rationale changes
But what about that rationale? Governmental support of biofuels hasn't always targeted climate change. Before it created the RFS, Congress supported fuel ethanol from grain for reasons having less to do with climate change than with "clean-burning" qualities that proved to have been overstated. While the oxygen boost from ethanol does lower emissions of carbon monoxide during gasoline combustion, vehicle-fleet modernization has made that pollutant much less serious a problem than it once was. And while extra oxygen also combats tailpipe emissions of ozone precursors, the benefit is compromised by an increase in fuel volatility.
Now, as EPA pointed out, the environmental motivation is mitigation of climate change. But problems exist there, too. Intuition says carbon dioxide emitted by combustion of grain ethanol and other biofuels is balanced by removal from air of the greenhouse gas during growth of plant feedstocks. Yet land-use changes, increased fertilization, and processing emissions make ethanol less friendly to the climate than the simplistic analysis suggests.
Congress acknowledged questions about environmental values and the increased food costs that come from dedicating a growing share of US corn production to fuel supplementation-44% in 2014-in 2007 when it capped requirements for ethanol from grain and set aggressive targets for ethanol from cellulose. But no one yet has made much ethanol from cellulose profitably. According to EPA data, in fact, more than half the paltry amount of cellulosic biofuel likely to be available this year and next isn't even ethanol; it's liquefied and compressed natural gas produced for transportation from biogas.
Because ethanol's net environmental advantages are modest at best, extension of vehicle fuel supply increasingly represents the substance's main allure for policy-makers. Ethanol is by far the most important biofuel, the only one significant to the US oil-product market. US blending of ethanol into vehicle fuel in March averaged 875,000 b/d, about one tenth of gasoline consumption. All other biofuels combined contributed only 52,000 b/d to fuel supply. But even the energy-security benefit is losing importance as domestic production of hydrocarbon liquids grows and imports shrink.
Experience and market changes thus have weakened the case for an aggressive RFS. And the program itself is broken. EPA must administer a law that, in effect, requires more ethanol than the market can use and far more cellulosic biofuel than can be produced. No wonder its decisions anger everyone.
Congress should repeal the RFS but won't. The renewable-fuel lobby is strong. Iowa caucuses loom. Also looming are gasoline price spikes related to the costs of noncompliance with increasingly unattainable blending requirements.
Reconsideration of the RFS is overdue. The program is legally and administratively haywire. And the rationale underlying it has turned mushy. In a political environment loony enough to make repeal unthinkable, why not consider crazy ideas?
A crazy idea
Here's one: If extension of vehicle-fuel supply with ethanol retains political appeal, consider ethanol from a nonbiological but abundant source: ethane and derivatives. The environmental tradeoffs evident with biological ethanol should brighten the prospect of directing a component of rapidly expanding supplies of natural gas toward the transport-fuel market.
If nothing else, responses to this proposition from the good folks in Iowa and Illinois, as presidential elections approach, would be entertaining.
