Climate change fuels arguments on both sides in ethanol war

Source: Amanda Reilly, E&E reporter • Posted: Wednesday, October 21, 2015

As the Obama administration approaches a deadline next month to finalize multiyear renewable fuel targets, climate change is furthering arguments both for and against adding more ethanol to U.S. transportation fuels.

Ethanol foes have doubled down on their contention that the corn-based fuel increases U.S. greenhouse gas emissions. They’ve used that assertion to question ethanol’s environmental benefits and argue against government support for the industry.

But biofuel producers are warning that the administration would undermine gains in reducing carbon from transportation fuels if it goes through with the proposed lowering of renewable fuel mandates. A reduced ethanol mandate, they say, would hurt investment in advanced biofuels.

The announcement last week that U.S. EPA’s internal watchdog will study life-cycle greenhouse gas analyses of biofuels has fired up both sides in the ethanol battle, with each saying it will validate its claims about biofuels’ carbon dioxide emissions.

“We welcome this review,” ethanol trade group Renewable Fuels Association said in a statement, “as it will give the public a clearer picture of the climate benefits that ethanol is producing today.”

Congress enacted the current renewable fuel standard in 2007 to promote the use of both corn ethanol and next-generation biofuels. Through the policy, EPA sets annual refining mandates for blending biofuels into gasoline and diesel.

EPA proposed earlier this year to set long-delayed targets for 2014 and 2015, as well as renewable fuel mandates for 2016 and the biodiesel requirement for 2017. While the agency proposed year-by-year increases in the use of biofuels, EPA’s targets fall short of the levels that Congress wrote into the 2007 law.

EPA received more than 600,000 comments on the proposal and is working toward a Nov. 30 deadline to issue a final rule. A broad coalition of stakeholders, including environmental groups, the oil industry and small-engine users, have called on EPA to set even lower targets. Biofuel producers have pushed for more robust mandates.

The renewed focus on ethanol’s climate change impact to further those arguments comes as President Obama is preparing for international climate change negotiations in Paris starting this December. The negotiations kick off the same day that the administration is poised to make a final decision on the RFS targets.

Last week, an industry coalition opposed to increasing RFS mandates launched an eight-week ad campaign called “Inconvenient Fact” to question ethanol’s benefits. The ad claims that mandating corn for ethanol nearly doubles greenhouse gas emissions.

Opponents last week also highlighted a study by University of Tennessee researchers that questioned the environmental and economic track record of the renewable fuel standard (Greenwire, Oct. 15).

“Our analysis shows that the RFS has created more problems than solutions, particularly with regard to hampering advancements in biofuels,” said UT researcher Daniel De La Torre Ugarte. “Corn ethanol was presented as a ‘bridge’ to advanced biofuels and a means of reducing GHG emissions. However, the reality is clear that this policy has been a bridge to nowhere.”

Biofuel producers have pushed back against the questions about ethanol’s environmental benefits and cast EPA’s proposal as a step backward for Obama’s domestic climate agenda even as it aims to negotiate an international agreement to address climate change.

They call the RFS the nation’s only successful policy aimed at reducing greenhouse gases.

This summer, biofuel advocates followed Obama around the country as he pitched his climate change plan with ads that promoted the RFS (Greenwire, Aug. 31). A new RFS group formed by former Sen. Jim Talent (R-Mo.) has also recently hammered the same point (E&E Daily, Oct. 1).

“Why are they [the Obama administration] going to be proposing things and working for things that are aspirational that require cooperation from foreign countries that are going to be costing a lot of money,” Talent told reporters recently, “and backing away from policies that reduce greenhouse gases today?”

IG to weigh life-cycle analyses

As debate intensifies, EPA’s internal watchdog last week announced that it will take up its own study of how the agency has conducted life-cycle analyses of biofuels’ carbon dioxide footprints (Greenwire, Oct. 16).

The Office of Inspector General said that it would examine how EPA has incorporated new emissions data from studies required by law. Among those studies is a 2011 report by the National Academy of Sciences that questioned whether the RFS was an effective policy for achieving greenhouse gas reductions.

Ethanol opponents cast the study as a way of updating life-cycle analyses that they don’t believe capture all ethanol emissions.

“The federal renewable fuel standard is supposed to promote fuels that emit less global warming pollution than gasoline. But it’s done just the opposite, stimulating a boom in ethanol made from corn, which over its life cycle causes emissions of more climate-wrecking carbon than gasoline,” said Emily Cassidy, a research analyst at the Environmental Working Group. “Yet the renewable fuel standard continues to encourage production of ethanol — and now the EPA’s internal watchdog wants to know why.”

Four bipartisan lawmakers who have pushed for reform of the policy also said they were “pleased” the inspector general was taking up the RFS.

Reps. Jim Costa (D-Calif.), Bob Goodlatte (R-Va.), Peter Welch (D-Vt.) and Steve Womack (R-Ark.) have introduced legislation that would, in part, strike corn ethanol from refiners’ RFS requirements.

“The negative impacts of the RFS are known,” the four said in a joint statement, “and it is our hope that the IG’s report provides much-needed clarity to the conflicting information the EPA has shared regarding the benefits of the RFS.”

But biofuel groups are hoping for vindication with the OIG study.

“The RFS is the only meaningful policy to help break Big Oil’s stranglehold on the liquid fuels marketplace,” Tom Buis, co-chairman of ethanol group Growth Energy, said last week. “This is an energy policy that is working. It is doing exactly what it was intended to do, with great success.”

Dueling studies

Whether the RFS — and the expanded ethanol production that comes from it — is an effective policy for addressing climate change remains an active area of debate among academics.

Several studies, including the University of Tennessee research, have cast doubt over whether ethanol and other biofuels lead to CO2 reductions compared with gasoline.

Others have come to opposite conclusions. The Argonne National Laboratory, for example, has found that ethanol reduces greenhouse gas emissions 34 percent compared with a gasoline baseline.

At a Brookings Institution event Friday in Washington, D.C., a pair of well-known RFS critics slammed the policy as being the least efficient means of reducing carbon dioxide emissions.

World Resources Institute fellow Tim Searchinger and Massachusetts Institute of Technology economist Christopher Knittel said policies such as cap and trade and a carbon tax are less expensive and risky than the RFS.

“Because we don’t know very well what the land-use implications are, that’s a riskier policy from a greenhouse gas perspective than a carbon tax,” Knittel said.

Knittel suggested that the RFS was actually economically worse than doing nothing to address climate change. According to his research, abating 1 ton of carbon dioxide through the RFS will cost $90 — much higher than the social cost of carbon, which is below $40 a ton.

But it’s unlikely a more general climate policy would force change in the transportation fuel market the way the RFS has done, said Bruce Babcock, an energy economics professor at Iowa State University.

Babcock, an ethanol supporter, noted that practitioners of life-cycle greenhouse gas analyses haven’t “bought into” research that’s questioned the benefits of ethanol and other biofuels. He said U.S. biofuel production hasn’t driven indirect land-use changes that contribute to global warming — the key tenet of climate arguments against the RFS — when land-use data over the last 10 years is taken into account.

Americans United for Change, a pro-RFS group, also pushed back against Knittel and Searchinger, charging that their research has been influenced by oil industry funding.

“There is a mountain of independent academic research,” the group said, “showing that ethanol use significantly cuts down carbon emissions compared to gasoline made from dirty fossil fuels.”