AAAS Center for Science, Technology and Congress

AAAS Policy Brief: Biofuels

Issue Summary | Resources

In an era of rising concern over climate change and energy security, the United States and other nations are increasingly turning to biofuels as an alternative energy source to traditional fossil fuels. The Energy Security and Independence Act of 2007 mandates production of 36 billion gallons of renewable fuel by 2022, with interim targets each year. In 2008, the U.S. met the requirement of 9 billion gallons, and this production of biofuels displaced the need for 321.4 million barrels of oil.⁸ As biofuel production increases, key areas under discussion include:

Sources of Biofuels
Food v. Fuel
Greenhouse Gas Reductions
Environmental Impacts
Infrastructure
The Economics
Economin and Policy Approaches
The State of R&D

Recent News

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Sources of Biofuels

Biofuels, derived from plant or animal materials ("biomass") such as corn, sugar cane, and perennial grasses, provide a stored source of energy that can be used as a transportation fuel.

First-generation ethanol biofuels are produced using sugar and starch biomass primarily from corn and sugarcane. The overwhelming majority of ethanol produced in the United States is corn-based. In January 2009 there were 170 biorefineries across 26 states producing 9 billion gallons of ethanol, a 34% increase over 2007.¹

Sugarcane, which also produces first generation ethanol, is a simple sugar that uses a process that is faster and less expensive to convert to ethanol than corn.² Sugarcane is currently grown in over 100 countries³ and requires a tropical environment to thrive. Brazil, the world's second largest producer of ethanol, uses sugarcane ethanol.

Second and third-generation biofuels are referred to as advanced biofuels. Cellulosic ethanol, based on a complex carbohydrate material, is considered a second-generation fuel. Cellulosic ethanol is derived from non-grain plants or plant parts including switch grass, prairie grasses, trees and forestry waste. In contrast to conventional ethanol, which uses grain as biomass, cellulosic ethanol biomass consists of cellulose, hemicellulose and lignin. Industry leaders have stated that commercialization of cellulosic ethanol plants is not far off, as over a dozen demonstration biorefineries are already online.

Third-generation biofuels include fuel that is made from algae, sometimes referred to as oilgae or algal fuel. Microalgae produces bio-oil, which can be used to produce biodiesel, biogasoline, green jet fuel, and other advanced biofuels.⁶ According to the Department of Energy, microalgae can potentially produce 100 times more oil per acre than any other terrestrial oil-producing crop. R&D on algal fuels is currently being conducted by the federal government and by industry.

Biobutanol has been in existence longer than ethanol, though its higher price has put it at a competitive disadvantage. It can be derived from either cellulose or conventional feedstock such as sugar and corn and differs from ethanol in the way the feedstock undergoes fermentation. The benefit to biobutanol is that it has a higher energy density than ethanol, though still not as energy dense at gasoline. ⁷

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Food v. Food

One of the central concerns raised about biofuel production is that biofuels made from food crops such as corn compete with food. The United States produces almost 40 percent of the world's total corn, distributing food domestically and internationally, particularly in poorer countries. In addition, corn is the feedstock for much of the dairy, meat and poultry industries. Many experts fear that the high demand for corn in the biofuels industry is raising the price of corn, with resulting increases in the price of food in the U.S. and abroad. In June 2008, corn prices peaked at above $7 a bushel.9 As a result, the meat, poultry and hog industries are expected to produce less meat in the coming year in order to increase prices and offset industry costs. With increased biofuel production worldwide, the International Food Policy Research Institute suggests that corn prices may increase 41 percent by 2020.

On June 12, 2008, the Senate Energy and Natural Resources Committee held a hearing on the influence of biofuel production on world food prices. Testimony from DOE and USDA officials suggested that the impacts were minimal although the director of the International Food Policy Research Institute provided findings that showed up to 30 percent of the rise in global grain prices between 2000 and 2007 may be due to increased production of biofuels from food-grains such as corn.

Some economists predict that the biofuels production may also inflate the price of other grains such as rice and wheat if farmers begin to replace these cheaper crops with highly-demanded corn. One example is cassava, sub-Saharan Africa's high starch staple food, whose land is being targeted for ethanol production. The price of cassava is predicted to swell 33 percent by 2010 and escalate to higher prices in years to follow.¹⁰

Proponents of corn-based ethanol refute these arguments as exaggerations and argue that science and technology will continue to improve the efficiency of growing corn, allowing corn growers to produce more corn on the same amount of acreage. One study by the USDA suggests that the United States has enough forestland and agriculture acreage to produce the amount of biomass, 1.3 billion tons a year, required to meet 30 percent of the country's gasoline demand while still meeting food demands.

Supports of cellulosic ethanol have pointed out that cellulosic ethanol production would enable the food and fuel industries to utilize different parts of the corn plant like the inedible husks in addition to non-food sources like algae, thereby reducing competition between food and fuel.

In addition to concerns about rising prices, some question the efficiency of using corn as a fuel rather than a food. According to Foreign Affairs, a 25-gallon tank full of 100 percent ethanol requires over 450 pounds of corn, which amounts to a year's worth of adequate caloric intake for one person.

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Greenhouse Gas Emissions Reduction

Biofuels have gained attention in recent years as a way to reduce fossil fuel emissions that contribute to global climate change; however, the ability of corn-based ethanol to lower contributions of greenhouse gases is called into question. Biofuels discharge significantly less CO2 when burned than conventional fossil fuels. However, CO2 reductions are less substantial when the entire life cycle emissions of the biofuel, rather than just the CO2 emitted from tailpipes, is taken into account. This would include the energy required to produce, harvest, and transport the fuel.

The Energy Independence and Security Act of 2007 outlines the creation of standards for greenhouse gas reduction that must be met by the production of renewable fuels. In May 2009, the EPA released a draft for public comment of new regulations for the Renewable Fuel Standard. The proposed rule would determine the criteria for renewable fuel, using an analysis of the lifecycle greenhouse gas emissions and international indirect emissions from land use changes for each fuel. Lifecycle emissions include the emissions from growing, harvesting, and transporting the biomass and from producing and transporting the fuel. The EPA analysis assessed multiple scenarios to use when determining emissions, including 30 year and 100 year time horizons and zero and two percent discount rates. In the 30-year case, very few types of corn ethanol plants met the 20 percent greenhouse gas reduction standard, while all but one reached it under a 100-year scenario. In general, the 100-year horizon is more favorable to biofuels, as most of the emissions from clearing land occur in the beginning and therefore become less important over a longer time frame. In contrast, less water- and energy-intensive feedstock such as cellulose emit 82 to 85 percent less CO2,10 reducing emissions by about 115 percent.¹¹ According to the May 2009 EPA analysis, switchgrass and corn stover ethanol reduced emissions more than 100 percent under both timeframe scenarios.

The proposed rule did not sit well with many members of Congress. In the House, the Agriculture Subcommittee on Conservation, Credit, Energy and Research and the Small Business Subcommittee on Regulations and Healthcare held hearings on the proposed rule in May 2009. Much of the displeasure voiced at the hearings concerned the use of international indirect land use effects in the EPA calculations. Rep. Collin Peterson (D-MN), chairman of the Agriculture Committee, introduced legislation (H.R. 2409) with Ranking Member Frank Lucas (R-OK) to repeal the energy bill provisions that required EPA to include indirect land use effects in their calculations. EPA officials noted that EPA will peer-review the lifecycle analysis during the public comment period of the proposed rule.

The American Clean Energy and Security Act of 2009 (H.R. 2454), which passed the House on June 26, includes language to delay EPA rulemaking that includes international indirect land use analysis for at least five years.

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Environmental Impacts

Corn-based ethanol requires high amounts of energy, water and fertilizer. In addition, corn-based ethanol stores only two thirds of the energy content of oil, meaning that more biofuels are needed to travel a comparable distance. Scientific studies have found that corn uses more energy than other feedstock, producing only 25 percent more energy than it consumes.¹²

The use of fertilizer for corn has raised environmental concerns. Fertilizer contains heavy levels of nitrogen, which can lead to groundwater pollution and "dead zones," or areas of extremely low oxygen as found in the Gulf of Mexico. Cellulosic feedstock requires less petroleum-based fertilizer and replanting than corn.⁵

Increasing scale of production raises environmental concerns about deforestation. Environmentalists are troubled by the vast deforestation occurring in Southeast Asia to make way for oil palm production, which has tripled in a single decade. They argue that biodiesel made of palm oil produced on deforested land hurts rather than helps the efforts to mitigate global warming. Recent reports of protected forest lands in Uganda being sold to an ethanol company have also fueled serious alarm in the environmental community.¹³

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Infrastructure

Ethanol cannot be transported through the same pipelines currently utilized by conventional gasoline, as ethanol can easily absorb water and erode pipes. Consequently, ethanol cannot be blended into gasoline at refineries; it must be separately transported closer to filling stations and blended onsite using an inefficient and expensive distribution infrastructure that relies on trucking and railing ethanol to destinations.

Recent efforts have been made to encourage biofuels technology that is compatible with existing infrastructure. In February 2009, DOE announced it would award $30 million in biofuel infrastructure grants to 17 companies.¹⁷

Senator Tom Harkin (D-IA), chairman of the Committee on Agriculture, Nutrition, and Forestry, unveiled the Renewable Fuel Pipelines Act (S.828) to allow federally-guaranteed loans for renewable fuel pipeline construction. The bill authorizes loan guarantees for the construction of renewable fuel pipeline projects. Rep. Leonard Boswell (D-IA) has introduced counterpart legislation in the house (H.R.864). Senator Kent Conrad (D-ND) has introduced the Rural Revitalization Act of 2009 (S.323), which directs the Secretary of Energy to make loan guarantees for renewable fuel pipelines.

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The Economics

Historically, the United States has invested most heavily in ethanol. A 51 cent per gallon ethanol blenders' tax credit established in 1978 and the 54 cent per gallon import tariff established in 198018 were put in place to protect the domestic ethanol industry. The Food, Conservation, and Energy Act of 2008 (P.L. 110-246, H.R. 6124), also known as the Farm Bill, created a cellulosic biofuels producer tax credit for up to $1.01 per gallon.

Many argue that corn-based ethanol independent of government subsidies and tariffs is not competitive in the energy market, though that could change in a carbon-constrained economy. Some industry experts have noted that it is difficult for growers to produce biomass for cellulosic ethanol production instead of corn because government subsidies and a ready market provide too many incentives to grow corn.
Despite suggestions that corn may not be the answer, many Members of Congress serving the Corn Belt states continue to protect and promote the corn-based ethanol industry. While some Members argue that removing tariffs and subsidies will hasten the use of biofuels in America by making the fuel more affordable, others claim that the tariffs and subsidies in place are vital for growing America's young biofuels market. They also point out that U.S. dollars should be invested in domestic energy production rather than abroad.

Currently, ethanol is most commonly used as a fuel additive. Ethanol is blended into most conventional gasoline fuel because it enhances the octane level of gasoline, which improves air quality. Conventional vehicles are capable of running on E10, a 10 percent ethanol and 90 percent gasoline blend. The EPA is recently sought public comment on increasing the allowable ethanol content of gasoline to 15 percent. Fuel mixes with significantly high levels of ethanol such as E85 (85 percent ethanol and 15 percent gasoline) require flex-fuel vehicles that are equipped with alcohol-tolerant parts such as stainless steel fuel tank and Teflon-lined fuel hoses.¹⁹

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The State of R&D

Industry leaders are stressing the need for more efficient production of biofuels as well as the debut of second and third generation technologies, with calls for more R&D into increasing crop yields and developing crops with favorable characteristics to facilitate the fuel conversion process. R&D in cellulosic ethanol is focused largely on increasing cellulose, which is converted by enzymes to sugars for ethanol reducing lignin, which locks cellulose molecules firmly in place and makes them difficult to break down. Congress and the Administration are responding with a variety of funding approaches.

In February of 2007, the Department of Energy (DOE) announced it plans to invest $485 million in six cellulosic ethanol plants over four years in an effort to encourage commercialization of cellulosic ethanol.20 A month later, the DOE announced that it would invest another $23 million in five cellulosic ethanol conversion projects.²¹ The projects are intended to research ways to improve cellulosic conversion into fuel, making it a more cost effective process. In December of 2008, DOE announced it would invest $200 million over six years in pilot- and demonstration-level projects that produce advanced biofuels, such as biobutanol, algae-derived fuels, and green gasoline.²²

The 2008 Farm Bill contains a number of provisions designed to encourage the production of biofuels as well as $20 million in competitive research grants in fiscal year 2009.²³ The bill also includes biorefinery loan guarantees and a biomass crop assistance program.²⁴

The Emergency Economic Stabilization Act of 2008 (H.R.1424), which was signed into law on October 3, 2008 (P.L. 110-343), contains several incentives for biofuel research and production. This includes new tax credits for cellulosic biofuel production, increases in the tax credits for production of biodiesel, and extension and expansion of the alternative fuel credit.

On May 5, 2009, President Obama signed a presidential directive to advance biofuels research and commercialization. He announced the creation of the Biofuels Interagency Working Group, which will develop steps to increase the biofuels market. President Obama also announced that DOE would invest $786.5 million in advanced biofuels research and development and for biorefinery demonstration project as part of the American Recovery and Reinvestment Act (ARRA).²⁵
Third-generation biofuels have also received a recent boost from federal R&D efforts. NASA has announced research efforts in creating clean energy biofuel from algae. Algal fuel research and development also recently supported by the ARRA, which designated $50 million to create an algal biofuels consortium through the Department of Energy.²⁶

The private sector has also started investing in R&D. ConocoPhillips plans to establish an eight-year, $22.5 million research program at Iowa State University that will focus on conversion technology and improved crop production. BP is granting $500 million to University of California, Berkeley to establish The Energy Biosciences Institute. The Institute is intended to discover and develop biofuels technologies and improve crops. Exxon Mobil²⁷, Chevron²⁸, and Dow Chemical²⁹ have each announced partnerships with start-up companies to fund research and development efforts for algal-based biofuels. Industry giants BP and DuPont formed a partnership in 2003 to develop and commercialize what they consider the next generation of biofuels in biobutanol. In April 2009, major oil and gas company Total announced investments in the biobutanol company Gevo.³⁰

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Endnotes

¹ Renewable Fuels Association Industry Outlook 2009
²Science, 16 March 2007
³ WWF Better Sugarcane Initiative
⁴Proceedings of the National Academy of Sciences, 23 March 2009
⁵National Journal, 8 March 2009
⁶Department of Energy, 14 October 2008
⁷Biofuel Review, 20 April 2007
⁸"Renewable Fuel Association, Ethanol Industry Outlook 2009
⁹BBC News, 11 June 2008
¹⁰Foreign Affairs, May/June 2007
¹¹"Cellulosic and Grain Bioenergy Crops Reduce Net Greenhouse Gas Emissions Associated with Transportation Fuels" Paul R. Adler, Stephen J. Del Grosso and William J. Parton
¹²Science Daily, July 2006
¹³New Scientist.com News Service, April 2007
¹⁴Dr. Keith Collins, Chief Economist U. S. Department of Agriculture. Senate Environment and Public Works Committee Testimony (6 September 2006)
¹⁵Dr. Keith Collins, Chief Economist U. S. Department of Agriculture. Senate Environment and Public Works Committee Testimony (6 September 2006)
¹⁶University of Arkansas Division of Agriculture News, March 2007
¹⁷Department of Energy, 23 January 2009
¹⁸Renewable Fuels Association
¹⁹Renewable Fuels Association E85 Page
²⁰Department of Energy, 28 February 2007
²¹Department of Energy, 27 March 2007
²²Department of Energy, 22 December 2008
²³US Department of Agriculture, August 2008
²⁴US Department of Agriculture, 19 November 2008
²⁵Department of Energy, 6 May 2009
²⁶Department of Energy, 5 May 2009
²⁷New York Times, 13 July 2009
²⁸Solazyme, 22 January 2008
²⁹New York Times, 28 June 2009
³⁰Gevo, 27 April 2009

Updated July 31, 2009