Stress-Testing Biofuels: How the Game Was Rigged

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(l. to r.): Kevin Lamarque / Reuters; Brennan Linsley / AP

Last week, while the financial world was obsessing over stress tests for fragile banks, the environmental and agricultural worlds were watching the results of the Obama Administration's stress tests for renewable fuels. An outgrowth of the 2007 energy bill, the tests were supposed to document whether corn ethanol and other biofuels designed to replace fossil fuels would accelerate or alleviate global warming overall. But like the much-criticized bank checkups, these stress tests don't seem particularly stressful.

The draft conclusions announced by Environmental Protection Agency (EPA) administrator Lisa Jackson were that cellulosic ethanol and other next-generation renewables will dramatically reduce greenhouse-gas emissions over their entire life cycle, but that in some scenarios, corn ethanol (as well as lesser-used soy biodiesel) can produce even more emissions than gasoline. Some environmentalists and journalists have portrayed this as a courageous rebuke to the powerful agro-fuels lobby, while some advocates for farmers have complained that the stress tests were too tough. At a hearing after the announcement, House Agriculture Committee chairman Collin Peterson, a Minnesota Democrat, accused the EPA of attacking corn and soybean farmers. "You're going to kill off the biofuels industry before it even gets started," Peterson said. "You are in bed with the oil industry!" (View 10 next-generation green technologies.)

It's hard to see how. Earlier studies exposed corn ethanol as a carbon catastrophe; the EPA had to use extremely generous assumptions to produce scenarios in which it's even remotely attractive as a fuel alternative. In any case, the heavily subsidized corn-ethanol industries won't really be penalized for promoting deforestation and accelerating global warming; Congress exempted its existing plants from any consequences in the 2007 law requiring the stress tests. At her May 5 news conference with Energy Secretary Steven Chu and Agriculture Secretary Tom Vilsack, Jackson suggested this was a good thing, because corn ethanol is an "important bridge" to better biofuels. The Administration also announced that it plans to push the auto industry to make flex-fuel vehicles that run on 85% ethanol blends — and since ethanol plants have been slammed by a combination of high corn prices, the rise of cleaner technologies and the lousy economy, Washington will help them get credit.

In other words: O.K., O.K., it might imperil the planet, but fortunately we can't do anything to stop it, and we actually plan to encourage it.

In fairness, corn ethanol was already pretty much a done deal; Congress demanded 15 billion gallons in annual production by 2022, and the industry is already almost there. That is why the real stress tests that mattered were the ones concerning biofuels of the future like cellulosic ethanol grown from switchgrass — which has not been proven commercially viable but has been hailed as a kind of magic weed. Once again, the EPA used rosy life-cycle assumptions to conclude that next-generation biofuels will reduce billions of tons of emissions over the next century, ultimately reducing our oil consumption by 11%. If those draft conclusions become final, they will commit the U.S. to an additional 21 billion gallons of biofuels by 2022.

Princeton scholar Tim Searchinger, who helped launch a global rethinking of biofuels in 2007 by calling attention to their effects on land use, warns that the EPA assumptions are extremely optimistic — and that if they're wrong the consequences could be extremely dire. "It takes a lot of land to make a small amount of energy," Searchinger says. "Academic studies have concluded that if the world gets even 10% of its energy from these new kinds of crops, most tropical forests will probably disappear." (Read "The Clean Energy Scam.")

Farm fuels can sound like the ultimate win-win situation, reducing our dependence on carbon-intense fossil fuels while boosting demand for American farm products. And they're "renewable," which has become a kind of synonym for green. But years ago, researchers began raising concerns about the direct emissions created by the heavy machinery and petroleum-based fertilizers it takes to grow corn and other biofuel feedstocks, the energy-intensive plants that convert the crops into fuel and the trucks that transport the fuel to market. A slew of studies have concluded that when you include all these life-cycle emissions, corn ethanol only produces about 20% fewer emissions than gasoline, although cellulosic ethanol produced from feedstocks like switchgrass can reduce emissions around 90%.

Yet the real problem with farm fuels, as Searchinger and others have shown, is in the indirect effects on land use: when an acre of land is used to grow fuel instead of food, an extra acre somewhere else is probably going to be converted into farmland to grow food. And that acre may well be an acre of wetland or forest that would otherwise store loads of carbon. So farm fuels become a lose-lose deal: exacerbating the deforestation that already creates one fifth of the world's carbon emissions, and driving up global food prices. (See pictures of the global food crisis.)

This is why Congress included the stress tests along with a huge biofuels mandate in its 2007 energy bill, throwing a bone to environmentalists who were freaking out that the alternative fuels they had championed for years were in fact ecological calamities. The law — supported by then-Senator Barack Obama — required life-cycle analyses that would calculate direct and indirect emissions.

The renewable-fuels lobby thinks the EPA should just ignore the indirect emissions, because they're hard to calculate. But Searchinger points out several ways the EPA gave biofuels the benefit of the doubt. Its analysis of direct emissions gave corn ethanol an advantage over gasoline nearly three times larger than most previous studies; it gave cellulosic ethanol savings 50% higher than nearly all other studies. It based most of its numbers not on what farmers and ethanol producers do now but on what it hopes they will do in 2022, assuming dramatic increases in crop yields and energy efficiency. And after the public comment period, it's fair to assume there will be intense pressure to make the analysis even more sympathetic to farm fuels.

The starkest example of the problems with the analysis is the time horizon. When the EPA studied a reasonable 30-year time period, even with its generous assumptions, soy biodiesel and corn-ethanol plants powered by coal or natural gas actually produced more emissions than gasoline; corn ethanol only passed the stress test (and just barely) when powered by the cleanest possible power. And that analysis assumed it's a good trade-off to accept massive emissions today in exchange for reductions over 30 years, when in fact massive emissions today could help trigger devastating ice melts and other feedback loops that could make reductions over 30 years practically irrelevant.

But the EPA also studied a 100-year time horizon, which makes the numbers look a bit better for corn and soy, but makes no sense: Who knows if we're going to use biofuels or gas or even automobiles for the next 100 years? Scientists believe we need to reduce our emissions 80% by 2050 to avoid catastrophe; the notion that we should tear down our rain forests and peatlands today in the hope that our cars will burn a bit cleaner a century from now is political analysis, not environmental analysis. "That's something we'll have to take into account as we go back and look at this," an EPA official told me.

It's true that Congress forced the Administration into this weird situation, in which it has to conduct pro-forma analyses of a policy that's essentially a done deal. Even if the EPA does rule that some biofuels flunk the life-cycle test, the industry can still apply for waivers.

It's also true that there's a lot of uncertainty when it comes to biofuels. But it's not good uncertainty. Study after study suggests that growing fuel could be a disaster for the planet, while raising global food prices and promoting global food riots. The amount of grain it takes to fill an SUV with ethanol could feed an adult for a year; we need every acre of farmland to feed the world. President Obama never claimed to be a reformer when it came to ethanol, and he and Vilsack have been big supporters of next-generation biofuels. Maybe there's nothing EPA officials can do to stop the renewable-fuels steamroller, but it would nice if they suggested slowing it down.