Secretary of Agriculture Tom Vilsack and Iowa Governor Terry Branstad appeared together recently defending the Renewable Fuel Standard from recent attacks from people like Robert Bradley Jr. who writes for Forbes. Bradley, an adjunct scholar of the fossil-fueled Cato and Competitive Enterprise Institutes, said that now is the time to roll back the renewable fuel standard (RFS) which sets targets for the amount of fuel that refiners must buy containing biofuel. He claims that, “if Washington were a business, counterproductive rules and regulations would be either reformed or revoked.”
That sounds like common sense, but perhaps it begs the question of, counterproductive for who, oil company stockholders or all of us?
The piece named three primary concerns with the new RFS2 mandate.
- Environmental impacts: smog due to the NO2 content of ethanol
- Price impacts of competition for corn
- Ability of older model cars to handle the higher 15% blend
Let’s take a look at these. There are two primary environmental criticisms that have been leveled at the biofuels industry. One of them is associated with the plants themselves, while the other deals with vehicular smog resulting from burning ethanol. It’s true that in 2010, the EPA found higher than expected levels of carbon monoxide and other pollutants emitted from several plants, but they have taken action. Regulations are in place. One plant in Minnesota received an $800,000 penalty last year for pollutions violations.
More serious are the smog allegations that claim that up to 200 people could die each year due to increased ozone levels starting in 2020. These claims were based on a 2007 report by Mark Jacobson of Stanford. However, that report, not only understated the uncertainty associated with his predictions, but also based them on the assumption that by 2020, the entire US vehicle fleet would be running on 85% ethanol, rather than the 15% that is being proposed by the RFS. That’s 567% higher.
The price impact of ethanol on food prices has been widely discussed. Given the unexpected drought in 2012, there were some price pressures placed on the market. However, this should be seen in context. Corn production per acre has doubled while the ethanol yield per bushel has increased by 27%. Growers built up inventories for the biofuel requirements, which is why there was a corn surplus in 2011 that was exported to Brazil, Canada, the UK and the Netherlands to help meet their biofuel mandates. And while close to 40% of the corn harvest is used for ethanol, a full one third of that is returned as distillers dry grain which is used for chicken feed. While there was a price increase last year, that led to increased production in other countries, such that the overall global yield was only down 2%.
As for the impact on car engines as the result of increasing ethanol content from 10% to 15%, that seems to still be the subject of controversy. EPA claims that E15 should be fine for 2001 model cars or newer. That finding was challenged recently by a Coordinating Research Council (CRC) report cited by the American Petroleum Institute, whose members might have a vested interest here. The report claims that the higher levels of ethanol blended into fuel could cause “fuel system component swelling, erratic fuel level indicators, faulty check-engine lights and failure of other parts that can lead to breakdowns.”
Fuels America, a biofuels support coalition said that over 6.5 million miles of testing had been done, “equivalent to 12 round trips to the moon (and) makes E15 the most tested fuel, ever.”
The question is tied up in legal wrangling between the EPA and the CRC and could wind up in the Supreme Court.
Meanwhile, the International Energy Agency (IEA) released their Tracking Clean Energy report last week form New Delhi, in which they call for more biofuel production to help reduce greenhouse gases.
The tipping point for biofuels, as I have argued before, lies in the widespread deployment of cellulosic ethanol, which will bring powerful synergies to bear. Success of that endeavor depends on the industry support that the RFA will provide.
RP Siegel, PE, is an inventor, consultant and author. He co-wrote the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water in an exciting and entertaining format. Now available on Kindle.
Follow RP Siegel on Twitter.