NRC Report: RFS Mandates for Cellulosic Biofuels in Jeopardy

October 5, 2011 01:32 AM

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Two House lawmakers plan bill to alter RFS

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Meeting the cellulosic biofuels production mandated via the Renewable Fuels Standard (RFS) may not happen unless the technology emerges soon to make production of ethanol from cellulosic feedstocks a commercially viable options, according to a new study published by the National Research Council (NRC). Further, the NRC also questioned whether the RFS will indeed reduce U.S. greenhouse gas emissions. Link

Facts and figures. With a 36 billion gallon mandate by 2022, and only 15 billion gallons coming from corn-based ethanol, the NRC said meeting the mandates for 4 billion gallons of advanced biofuels and 16 billion gallons of cellulosic biofuels could be in jeopardy.

While consumption mandates for conventional biofuels and biomass-based diesel fuel are expected to be met, the NRC report said "whether and how the mandate for cellulosic biofuels will be met is uncertain." NRC, like most, focused on the fact that currently there are no commercially viable cellulosic production facilities and the capacity to meet those mandates is not there "unless the production process is unexpectedly improved and technologies are scaled up and undergo several commercial-scale demonstrations in the next few years."

"In addition, achieving the renewable fuel standard would increase the federal budget outlays, mostly as a result of increased spending on grants, loans, loan guarantees, and other payments to support the development of cellulosic biofuels and foregone revenue as a result of biofuel tax credits," a release on the report stated. The NRC report also raised the prospect this could also boost food prices and thus government nutrition program costs, but added this caveat: "given that biofuels are only one of many factors affecting food retail prices, it will be hard to attribute any future increases in program costs to the standard alone."

On the issue of greenhouse gas emissions, the NRC report indicated it is "uncertain" just how much biofuels will reduce these emissions compared to just using petroleum. The waded into the controversial area of indirect land use changes and also raised the prospect that producing these crops aimed solely for biofuels production "will probably require conversion of uncultivated land or the displacement of commodity crops and pastures."

NRC did also note a key point that many biofuels backers have emphasized -- that U.S. crop yields will continue to rise and remove some of the upward price pressure than many blame on current biofuels production.

USDA Secretary Tom Vilsack was among those discounting the NRC report, telling reporters in a conference call on trade that the NRC report was "not as up to date as it needs to be in terms of the science."

"I think it's unfortunate that reports that are based, in my view, on somewhat out-dated information are basically suggesting we should give up the ghost," Vilsack stated. "We're not going give up on this industry."

The ethanol industry was also quick to respond. "Global demand for energy continues to escalate, yet this report chooses to focus with laser-like precision on the perceived shortcomings of conventional and next-generation biofuels," said Geoff Cooper, the Renewable Fuels Association's vice president. "Instead, we should be comparing the relative costs and benefits of all future energy options."

Growth Energy CEO Tom Buis labeled the report speculative and predicted that "a continued commitment to the [Renewable Fuel Standard] will create the market certainty that is crucial for both first-generation and second-generation ethanol." Buis warned that "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."

Comments: It would seem this NRC report sort of offers something for both backers and bashers of biofuels. On one hand, it raises an issue that even biofuels backers are concerned about -- that cellulosic biofuel production is still a laboratory and not commercial item. But the NRC also wades into territory that many biofuels bashers cite -- indirect land use. EPA had answered that question relative to the RFS but this report brings the matter back to the surface.

Another interesting aspect apparently missing from the NRC work is EPA can waive the requirements for the RFS relative to cellulosic biofuels as they have done so far given the lack of commercial production. The EPA lowered cellulosic targets via the RFS in 2010 and 2011 and is mulling lowering the target again in 2012. The agency said no cellulosic ethanol was commercially produced in the first six months of this year.

RFS mandate naysayers use report. After the report's release, two House Agriculture Committee members, Bob Goodlatte (R-Va.) and Jim Costa (D-Calif.), again said they would introduce legislation to change the RFS, but they provided no further details.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.






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