Biofuels: benefit or boondoggle? 


The energy bill President Bush signed into law last month mandates a sevenfold increase in the use of biofuels by 2022.Such fuels are touted as a way to free America from what the president has referred to as our country’s “addiction to fossil fuels.” These substitutes are currently manufactured from cellulosic biomass resources including wood, waste and plants.

But expanding annual domestic production from the current 4.8 billion gallons to 36 billion gallons most likely will not be easy, cheap or clean.

It will, however, be controversial.

In November, Jean Ziegler, U.N. special rapporteur on the right to food, called for a five-year moratorium on the use of food crops for fuel. He labeled such practices a “crime against humanity.”

Researchers point out that the use of fossil fuels to grow and process corn into fuel not only results in a net energy loss but also further creates pollutants that contribute to global warming.

Meanwhile, increased demand for corn from both domestic and foreign markets has raised prices to record levels, which in turn has increased ethanol production costs, which in turn has led some investors to rethink their involvement in biofuel plants.

Citing the ethanol glut that depressed prices, VeraSun Energy Corporation recently suspended construction of a plant in Reynolds, Ind., also known as “Bio-Town USA.” The announcement took some luster off of Gov. Mitch Daniels’ Hoosier Homegrown Energy plan to promote the production and use of corn-based ethanol.

Daniels sees this as an unprecedented opportunity. According to his press secretary, Jane Jankowski, the state is well-situated to supply the increasing global demand for food and energy.

“The long-term prospects for grain and ethanol production are quite favorable,” she wrote via e-mail. “But like all businesses, farmers and ethanol producers will need to manage very carefully during a transition from markets dominated by surpluses to markets dominated by full utilization of our productive capacity.”

She noted that VeraSun is expected to resume construction in Reynolds this spring and added that six additional plants are under construction and are expected to come on line this year, including the world’s largest integrated soybean crushing/biodiesel production plant in Putnam County.

Biofuel backlash was also absent at a Jan. 4 “Renewable Energy Briefing” by Sen. Richard G. Lugar, who expressed vigorous support for biofuels as one of the strategies for creating what he termed “a more secure energy future.”

Lugar’s remarks to the Indiana Renewable Energy Forum were timely, as oil reached a record-high $100 per barrel Jan. 2. Lugar asserted that “energy is the most vital topic of the 2008 presidential election” and underlies almost every major foreign policy issue. “American national security will be at risk as long as we are heavily dependent on imported energy,” he said.

“Our energy dependence is perpetuated by a lack of national will and focus,” Lugar said. “Only the president has the visibility to elevate a cause to national status and only the president can leverage the buying power, regulatory authority and legislative leadership of an adminstration behind solving a problem that is highly conducive to politics, procrastination and partisanship.”

He called for the next president to “use every power to make competitively priced biofuels available to every motorist in America.” This would require ensuring that new cars sold here are capable of running on flexible fuels (gas/ethanol mixtures as well as conventional gasoline) and expanding the availablity of E85 fuels to a quarter of the nation’s filling stations. E85 is an alcohol fuel mixture containing up to 85 percent denatured ethanol and gasoline.

Lugar’s focus was not limited to biofuels. He also lauded coal and nuclear power, gently chiding those he called “green idealists” who want to end the use of coal. “That’s not going to occur in the world in which we live,” he said.

As for nuclear power, Lugar said, “Continued progress on safety and waste issues is necessary, yet nuclear power offers an abundant alternative to carbon-intensive fuels.”

During the question-and-answer session following his prepared remarks, Lugar acknowledged the dilemma Indiana faces in promoting ethanol: There aren’t sufficent outlets. “We celebrated the 97th pump for E85 in all of Indiana yesterday,” he said.

In other words, getting the fuel is difficult. “The infrastucture problems are huge,” Lugar said, adding that it’s unclear how many flex-fuel vehicles are being used in the state. “The reason there’s some ambiguity is that maybe half of the people who have one, don’t know that they have one.” He said that auto manufacturers resisted mandates to build flex-fuel vehicles and haven’t promoted them.

Lugar also addressed concerns that corn-based biofuel uses more energy than it produces. “That charge has been made and clearly a lot of energy is used but I think the research on ethanol improves the process so that probably the expenditure is declining.”

Turning the question around, he asked reporters, “What’s the alternative? Would you scrap the situation and begin importing more foreign oil? We’re trying to think what we have in the United States right now that we can use. We’ve got some corn.

“I would say this is the beginning,” Lugar continued. “Almost everybody believes that energy efficiency will occur as more innovation happens with other fibers.”

Regarding reports of increased pollution from ethanol made from corn, Lugar replied, “The state of the art seems to be improving fairly rapidly as people have more experience.”

Asked whether establishing mandates for ethanol are in effect a subsidy for agribusiness giants, such as ADM and Cargill, Lugar replied, “In my remarks I said that to jumpstart biofuels usage, I advocate replacing the current static 51 cent subsidy for ethanol with a variable subsidy tied to the price of oil that includes a sunset provision.

“As you write these laws, you need to be moving foremost to how the subsidy is reduced and finally dispatched,” he said. “What we’ve always done in farm bills is to put in the subsidies and keep them forever.” n


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