New Report Casts Doubt on Ethanol Policy

A recently released report on the future of the biofuel industry, by the National Research Council concludes that the cellulosic ethanol targets are unlikely to be met and casts doubt on the utility of the renewable fuel standard. The report can be downloaded  (after a free registration) here, though the report itself exceeds 400 pages, so its not easy reading. Allow me to include a long quote from the conclusion:

A key barrier to achieving RFS2 is the high cost of producing biofuels compared to petroleum-based fuels and the large capital investments required to put billions of gallons of production capacity in place. As of 2010, biofuel production was contingent on subsidies, tax credits, the import tariff, loan guarantees, RFS2, and similar policies. These policies that provide financial support for biofuels will expire long before 2022 and cannot provide the support necessary for achieving the RFS2 mandate. Uncertainties in policies can affect investors’ confidence and discourage investment. In addition, if the cellulosic biofuels produced are mostly ethanol, investments in distribution infrastructure and flex-fuel vehicles would have to be made for such large quantities of ethanol to be consumed in the United States. Given the current blend limit of up to 15-percent ethanol in gasoline, a maximum of 19 billion gallons of ethanol can be consumed unless the number of flex-fuel vehicles increases substantially. However, consumers’ willingness to purchase flex-fuel vehicles and use E85 instead of lower blends of ethanol in their vehicles will likely depend on the price of ethanol and their attitude toward biofuels. Producing drop-in biofuels could improve the ability to integrate the mandated volumes of biofuels into U.S. transportation, but would not improve the cost-competitiveness of biofuels with petroleum based fuels.

This covers much of what CEI has concluded: cellulosic ethanol is too expensive to be widely produced, it is likely to remain so in the future, and blends exceeding 15% are tricky given the lack of cost competitiveness. This is why the Renewable Fuel Standard should not exist. Previous CEI work on cellulosic ethanol can be read here.

Naturally, the Renewable Fuels Association had an immediate press release condemning the study:

The results of a new National Academies of Sciences (NAS) study, entitled “Renewable Fuel Standard: Potential Economic and Environmental Effects of U.S. Biofuel Policy”, should be interpreted with extreme caution, the Renewable Fuels Association (RFA) warned today. Specifically, the NAS study released this morning and the executive summary reviewed by the RFA largely assesses ethanol and other biofuels in a vacuum and fails to appropriately compare the costs and benefits of renewable fuels to the impacts of the marginal petroleum sources they are displacing.

If the RFA disapproves, its probably a good study.

Senate Dumps Ethanol Subsidies

In a last minute push before the Senate leaves for holiday again, The Senate voted overwhelmingly to drop ethanol subsidies… Tax Breaks of $6 Billion a Year Now at Risk as Lawmakers Look for Ways to Reduce Budget Deficits — passed 73 to 27.

The WSJ reports:

A broad bipartisan majority of the Senate voted Thursday to end more than three decades of federal subsidies for ethanol, signaling that other long-sacrosanct programs could be at risk as Democrats and Republicans negotiate a sweeping deficit-reduction deal.

The tax breaks, which now cost about $6 billion a year, had long been considered untouchable politically because of the power of farm-state voters and lawmakers. Iowa’s role as the site of the first presidential caucuses has further elevated the political potency of the biofuel.

Ethanol Not So Green After All

Unfortunately, CARB a few weeks back, said ethanol produced twice the CO2 per gallon as gasoline, start to finish. You don’t think the corn plants and harvests itself did you? And you do know that ethanol delivers about 20% less BTUs per gallon.

The Environmental Protection Agency today says that corn ethanol — as made today — wouldn’t meet a congressional requirement that ethanol produce 20 percent less greenhouse gas than gasoline. But the agency said it is still more climate friendly than gasoline. The EPA in its analysis The Environmental Protection Agency says that corn ethanol — as made today — wouldn’t meet a congressional requirement that ethanol produce 20 percent less greenhouse gas than gasoline.

But the CARB report was retracted after first appearing on the web, for a more libtard friendly, ‘produces more CO2 than gasoline’.

Me, I say show me the facts, just the data please. Because I know the EPA lies, CO2 is not a pollutant, it’s plant food.

Now We Are Beginning To Find Out How Bad Ethanol Is

Most knowledgeable people, and I include myself in that group, knew all along that corn ethanol was a loser from the get go. You just cannot farm corm at zero CO2 costs, nor at competitive costs. Look, it’s quite simple. When car internal combustion engines were invented they were designed to run on what was known at the time, ethanol. Ethanol was just a form of moonshine, that anybody could make. So why not use it.

Corn Ethanol Will Not Cut Greenhouse Gas Emissions:

Ethanol, A Study In Unintended Consequences

It’s becoming increasing clear the ethanol boondoggle is designed to do nothing more than to raise gasoline prices. In fact, before the report was removed, the CARB report on ethanol said that ethanol required about twice the CO2 to use a gallon of, than did gasoline — End to end costs. You didn’t think farming, clearing land, planting, fertilizing, and harvesting crops was energy free did you. Who is going to build all the farm machinery, and where is that energy going to come from?

People fall for the dumbest things …

The WSJ put the costs  of a gallon of ethanol at the price of a bushel of corn, yes each gallon, consumes a bushel of corn to produce. So price parity is established, it’s the cost of a bushel of corn. There is nothing cost effective about that, unless high gasoline costs are your goal.