Study: U.S. Biofuels Policies Flawed

The U.S. needs to fundamentally rethink its policy of promoting ethanol to diversify its energy sources and increase energy security, according to a new policy paper by Rice University’s Baker Institute for Public Policy.

The paper, "Fundamentals of a Sustainable U.S. Biofuels Policy," questions the economic, environmental and logistical basis for the billions of dollars in federal subsidies and protectionist tariffs that go to domestic ethanol producers every year. "We need to set realistic targets for ethanol in the United States instead of just throwing taxpayer money out the window," said Amy Myers Jaffe, one of the report’s authors.

Jaffe is a fellow in energy studies at the Baker Institute and associate director of the Rice Energy Program.

As an example of the unintended economic consequences of U.S. biofuels policy, the report notes that in 2008 "the U.S. government spent $4 billion in biofuels subsidies to replace roughly 2 percent of the U.S. gasoline supply. The average cost to the taxpayer of those ‘substituted’ barrels of gasoline was roughly $82 a barrel, or $1.95 per gallon on top of the retail gasoline price (i.e., what consumers pay at the pump)." The report questions whether mandated volumes for biofuels can be met and whether biofuels are improving the environment or energy security.

The report, which includes analysis by environmental scientists, highlights the environmental threats posed by current biofuels policy. "Increases in corn-based ethanol production in the Midwest could cause an increase in detrimental regional environmental impacts," the study states, "including exacerbating damage to ecosystems and fisheries along the Mississippi River and in the Gulf of Mexico and creating water shortages in some areas experiencing significant increases in fuel crop irrigation." Moreover, the report challenges claims that ethanol use lowers greenhouse gas (GHG) emissions and argues, "There is no scientific consensus on the climate-friendly nature of U.S.-produced corn-based ethanol, and it should not be credited with reducing GHGs when compared to the burning of traditional gasoline."

In 2007, Congress passed the Energy Independence and Security Act (EISA) that mandated production targets for "renewable fuels," mainly biodiesel and ethanol. The bill mandated ambitious production targets of 9 billion gallons of biofuels a year in 2008 and rising to 36 billion gallons a year by 2022. Corn ethanol is capped at 15 billion gallons a year in the law, but even that level will be difficult to reach given logistical and commercial barriers, according to the study. The Baker Institute report finds, however, that the use of flex-fuel vehicles is not likely to be extensive enough to overcome the barriers to achieving the Energy Independence and Security Act of 2007 mandates for U.S. ethanol market saturation.

The EISA also called for 21 billion gallons of advanced biofuels, produced from sources like switchgrass, corn stover and algae, to be used in the nation’s fuel supply by 2022. But the report determines "existing mandated targets for advanced biofuels are not currently achievable — scientifically or commercially — and should be revisited."

As a result, the report’s authors wrote, "we encourage Congress to revisit these mandates and revise them to be in line with realizable targets and time frames to create an improved policy that will reduce uncertainty for refiners and allow a more orderly implementation of achievable goals and mandates by the EPA."

Finally, the report questions the tariff imposed on ethanol imported from Latin America and the Caribbean. Because sustainable production of U.S. domestic corn-based ethanol faces limitations, the report finds "tariff policies that block cheaper imports are probably misguided." As a result, the report states that, "we believe on balance that the economic and geopolitical benefits to this trade with select regional suppliers would outweigh any ‘energy security’ costs to having some larger percentage of U.S. ethanol supplies arriving from foreign sources."

In addition to Jaffe, the report’s authors include Pedro J. Alvarez, the George R. Brown Professor and chair of the Department of Civil and Environmental Engineering; James Coan, Baker Institute Energy Forum research associate; Marcelo E. Dias de Oliveira, consultant to the Baker Institute; Rosa Dominguez-Faus, graduate student researcher in the Department of Civil and Environmental Engineering; Diego E. Gomez, graduate student researcher in the Department of Civil and Environmental Engineering; Kenneth Medlock, the James A. Baker III and Susan G. Baker Fellow in Energy and Resource Economics at the Baker Institute; Ronald Soligo, Baker Institute Scholar and professor of economics; Lauren Smulcer, Baker Institute Energy Forum research associate; Joel G. Burken, professor of civil, architectural, and environmental engineering at the Missouri University of Science and Technology; and Susan E. Powers, professor of environmental engineering and associate dean of the Coulter School of Engineering at Clarkson University.

The study was supported by a research grant in environmental engineering from Chevron Technology Ventures.

To read the complete study, click here.

Topics: ,

Leave a Reply

One comment on “Study: U.S. Biofuels Policies Flawed

  1. I am really glad you had the “GUTS” to publish this information, which is not politically motivated, and which objectively evaluates the problems with current biofuels programs which are taxpayer supported and not an answer to our environmental problems.

Management Stories

ManagementNew Rabobank Report Calls for Farmer ROI Focus
July 25, 2016
As U.S. row crop farmers brace themselves for a third year of negative margins, Rabobank believes farmers must lower the Read More
ManagementGROWMARK Meeting Visit, Company Takeover Updates, and RNC Invite
July 22, 2016
Editors Paul Schrimpf and Eric Sfiligoj discuss their recent speaking engagement at GROWMARK’s eastern event, crop protection company merger rumors, Read More
ManagementLand O’Lakes Announces SUSTAIN Business Unit, Other Changes
July 20, 2016
Land O’Lakes, Inc. today announced the formal organization of a new business unit, SUSTAIN, and its leadership. SUSTAIN will focus Read More
Corn and ditch
ManagementStudy: Saturated Buffers Reduce Nitrates From Subsurface Field Drainage Systems
July 19, 2016
The Agricultural Drainage Management Coalition (ADMC), Agricultural Drainage Management Systems Task Force and Dr. Dan Jaynes with the National Laboratory Read More
Trending Articles
Heritage Cooperative
Retail FacilitiesKahler Automation Designs State-Of-The-Art Facility For Heritage Cooperative
July 4, 2016
Heritage Cooperative in Marysville, OH, needed an efficient liquid, dry and grain facility to serve the many needs of their Read More
The Andersons Waterloo
ManagementFirst Indiana Facility Certified Under 4R Nutrient Stewardship Certification Program
June 27, 2016
The 4R Nutrient Stewardship Certification Program has announced that The Andersons, Inc.’s Waterloo, IN, facility has been added to its Read More
Food IT
Industry NewsCalifornia Event Will Mix Ag And Tech Professionals To Explore IT Solutions
June 20, 2016
Silicon Valley is hot on agriculture, and an upcoming event in California will bring together the food and tech industries Read More
Monsanto Luling Plant
Eric SfiligojWhat’s Next For Monsanto?
May 31, 2016
For the folks at Monsanto’s headquarters in St. Louis, MO, it has been an eventful few weeks. Back on May Read More
Soybean Plant closeup
Industry NewsMonsanto Rejects Bayer Bid; Open To More Talks
May 25, 2016
Monsanto Co, the world’s largest seed company, turned down Bayer AG’s $62 billion acquisition bid as “incomplete and financially inadequate” Read More
Eric SfiligojPity The Monsanto Haters
May 23, 2016
An old saying goes thus: “Be careful what you wish for. You just might get it.” Given current events, there Read More
Latest News
Kochia
Crop InputsNufarm Launches New Herbicide for Resistant Kochia
July 25, 2016
Nufarm introduces Scorch herbicide for U.S. farmers and ranchers combating a broad range of troublesome broadleaf weeds. A unique premix Read More
ManagementNew Rabobank Report Calls for Farmer ROI Focus
July 25, 2016
As U.S. row crop farmers brace themselves for a third year of negative margins, Rabobank believes farmers must lower the Read More
Syngenta Sign
Crop InputsBloomberg: Syngenta-Chem China Deal on Track for Regula…
July 25, 2016
Syngenta AG, which has agreed to be taken over by China National Chemical Corp. for $43 billion, said talks with Read More
ManagementGROWMARK Meeting Visit, Company Takeover Updates, and R…
July 22, 2016
Editors Paul Schrimpf and Eric Sfiligoj discuss their recent speaking engagement at GROWMARK’s eastern event, crop protection company merger rumors, Read More
Crop InputsMonsanto: EU Approves Roundup Ready 2 Xtend Imports
July 22, 2016
Monsanto Co. announced today that the European Commission has granted import approval for Roundup Ready 2 Xtend soybeans. This milestone Read More
Syngenta headquarters in Basel, Switzerland
Crop InputsSyngenta Announces Alfalfa Seed Split Off
July 22, 2016
On September 1, 2016, Syngenta will transfer sales and distribution of alfalfa seed to the NEXGROW branded business that is Read More
Dow DuPont
Crop InputsDuPont, Dow Shareholders Approve Merger
July 21, 2016
DuPont and The Dow Chemical Company announced that, at their respective special meetings of stockholders held today, stockholders of both Read More
ManagementLand O’Lakes Announces SUSTAIN Business Unit, Oth…
July 20, 2016
Land O’Lakes, Inc. today announced the formal organization of a new business unit, SUSTAIN, and its leadership. SUSTAIN will focus Read More
Monsanto Luling Plant
Crop InputsReport: Bayer Shareholder Proposes Monsanto ‘Host…
July 20, 2016
One of Bayer AG’s top 20 shareholders said Wednesday it may make sense for the life-science company to launch an Read More
Young Corn Closeup
Industry NewsNew Leaf Symbiotics Snags Former Monsanto Microbials Le…
July 20, 2016
NewLeaf Symbiotics, announced today the appointment of Dr. Janne Kerovuo as Vice President for Research and Discovery.  Dr. Kerovuo comes Read More
Corn and ditch
ManagementStudy: Saturated Buffers Reduce Nitrates From Subsurfac…
July 19, 2016
The Agricultural Drainage Management Coalition (ADMC), Agricultural Drainage Management Systems Task Force and Dr. Dan Jaynes with the National Laboratory Read More
Case sprayer nozzle closeup
EquipmentAgronomists, CCAs, Custom Applicators Invited To FSR Ag…
July 19, 2016
Agronomists, Certified Crop Advisers (CCA) and custom applicators can stay current on agronomy issues on the grounds of the Farm Read More
Soybean Field
LegislationOhio Soybean Association Names Brian Hill Legislator Of…
July 19, 2016
The Ohio Soybean Association (OSA) has announced that State Representative Brian Hill (R-Zanesville) has been named one of two Legislators of Read More
Eric SfiligojThe Latest Monsanto Rumors: A Game Of Tones
July 18, 2016
When companies are engaged in the back-and-forth of the acquisition game, the tone of their various announcements is always important. Read More
Nozzle spray close-up
AdjuvantsWest Central Distribution Introduces New Elite Family O…
July 14, 2016
West Central Distribution recently released a new line of Elite adjuvants to work alongside the new herbicide technologies that combat Read More
Bayer sign
Crop InputsBayer Makes New Offer For Monsanto
July 14, 2016
Bayer AG boosted its takeover offer for Monsanto Co. to about $65 billion in a bid to overcome the U.S. Read More
ManagementAn Update on Water
July 14, 2016
CropLife Editors Eric Sfiligoj and Matthew Grassi discuss agricultural water issues in conjunction with a recent field trip in Ohio. Read More
Co-Alliance employee
EmployeesNew Purdue Program To Focus On Talent Management
July 14, 2016
Purdue University’s Center for Food and Agricultural Business is starting a new professional development program to help food and agribusiness Read More