NAS: RFS mandates won't be met without innovation, policy change

By Holly Jessen | October 04, 2011

A 423-page report from the National Research Council of the National Academy of Sciences released Oct. 4 concludes that it is unlikely the U.S. will meet cellulosic ethanol mandates in the renewable fuel standard (RFS) by 2022 without innovative technology development or policy changes. The report, which was sponsored by the USDA, U.S. DOE and U.S. EPA, adds that the renewable fuel standard “may be an ineffective policy for reducing global greenhouse gas emissions” and that achieving it would likely have mixed economic and environmental effects while increasing federal budget expenditures.

In response, Growth Energy pointed to the nation’s energy crisis, saying that the NAS report fails to put forth any real alternatives to addressing that issue. “There is no question that, as ten percent of the fuels market today, we are strengthening our national security by reducing our dependence on foreign oil,” said Tom Buis, CEO. “A continued commitment to the RFS will create the market certainty that is crucial for both first generation and second generation ethanol. But any effort to doubt or dismantle the RFS would block the growth of the industry and ultimately threaten American jobs, our environment and our energy security.”

The Renewable Fuels Association warned that the report should be interpreted with extreme caution, adding that it doesn’t compare the costs and benefits of renewable fuels to the impact of displacing petroleum, some from marginal sources. RFA did say, however, that it agreed with the committee’s conclusion that commercializing cellulosic ethanol will require more policy certainty, calling for an extension of the cellulosic ethanol tax incentives, for one. “It is true that the goals of the RFS could go unmet if we continually keep telling ourselves that we can’t do it,” said RFA Vice President Geoff Cooper, who presented oral testimony last year to the NAS committee that wrote the report. “Instead of wringing our hands about the challenges associated with revolutionizing our energy supply, we should immediately end the billions in subsidies channeled every year to the mature fossil fuel industry and invest in the advanced and cellulosic ethanol technologies and related infrastructure that are needed to get us over the hump.”

Both groups also pointed out that the NAS study acknowledges the difficulty in foreseeing the future and high uncertainly in what the committee was trying to estimate. “The bottom line is that it simply was not possible to come up with clear quantitative answers to many of the questions,” the report said.

The report, which was put together by the committee on Economic and Environmental Impacts of Increasing Biofuels Production, concluded that it’s uncertain what capacity biofuels will have to reduce greenhouse gas (GHG) emissions compared to petroleum. “How biofuels are produced and the changes in land use or land cover that occur in the process affect biofuels' impact on such emissions,” the report said. “Dedicated energy crops will have to be grown to meet the mandate, which will probably require conversion of uncultivated land or the displacement of commodity crops and pastures.”

It’s true that biofuels have the potential for environmental benefits compared to petroleum use, the committee said. However, the outcome depends on many factors, including feedstock, management practices, possible land-use changes and water availability. The report pointed to air-quality modeling that suggests ethanol is likely to increase air pollution and water use concerns.

Further, the report said that biofuels would only be cost-competitive with petroleum fuels when oil prices are high. At a price of $111 per barrel for crude oil, cellulosic biofuel is not economical, the committee said. In addition, without big increases in agricultural yields and improved biofuel yields, additional cropland will be needed to grow cellulosic feedstocks, possibly leading to increased prices for cropland.

The RFA and the Advanced Ethanol Council pushed back against many of the report’s conclusions, calling many regrettable and troubling. For example, Brooke Coleman, executive director of AEC wondered why the committee questioned the effectiveness of the RFS to reduce GHG emissions. “Even with land use change considerations, advanced biofuels are the lowest carbon fuels being developed in the marketplace; far and away less carbon intensive than electricity, natural gas and even hydrogen fuel cells,” he said.

The committee used out-of-date ethanol efficiency data, the RFA said. By including rainfall, the committee concluded that ethanol production could take up to 1,500 gallons of water per gallon of ethanol. “Attributing the feedstock’s consumptive water needs that are met by rainfall to the biofuel is disingenuous,” RFA said, adding that ethanol production requires less than three gallons of water per gallon of ethanol produced, according to recent research published in Biotechnology Letters. With this comparison, water requirements ethanol “compares quite favorably” for conventional gasoline and is better than oil sources such as tar sands. “Unlike the oil industry, ethanol’s water demands continue to fall, decreasing some 30 percent in the last decade,” the RFA said.

The statement that cellulosic ethanol is only cost-effective at high oil process was also challenged. “The statement that the best cost estimates for cellulosic biofuel are not economic when compared with fossil fuels when crude oil’s price is $111 per barrel is simply false,” said Coleman. “This finding is totally out of step with publicly available assessments released by the National Renewable Energy Laboratory and others. The members of the panel should push back from the keyboard and talk to the industry. They might be surprised at what they find in a very difficult economy.”