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EPA Science Panel upholds key scientific principles to guide biomass standards

2012-01-25T15:58:59Z

Sasha Lyutse, Policy Analyst, New York

Last summer, EPA temporarily exempted the carbon emitted from burning biomass from pollution standards under the Clean Air Act and convened a panel of scientific experts to advise it on crafting rules for the treatment of biomass.

Last week, that Science Advisory Board released its long-awaited draft evaluation of EPA’s proposed Accounting Framework for Biogenic CO2 Emissions from Stationary Sources. [Note, this report is not final and meant only as a deliberative draft.] Here’s our first read:

In its report, the SAB determines several scientific principles to guide EPA, which we believe will be critical to biomass regulations going forward.

First, it issues a clear and unequivocal rejection of the idea that biomass can automatically be treated as carbon neutral. As we discuss here, the lifecycle carbon emissions of some forms of biomass are neutral or close to neutral over a reasonable period of time—meaning that they completely balance the production and use of carbon, resulting in zero net emissions. Feedstocks like landfill gas, forest and crop residues that would otherwise be burned, and annual crop residues not needed to preserve soil carbon stocks, have low net emissions within very short periods of time and can reasonably be considered potential low-carbon alternatives to fossil fuels like coal. On the other hand, net carbon emissions from harvesting and burning whole trees and other similar forms of biomass will result in as much if not more carbon emissions than burning coal for decades.

The SAB appropriately concludes that:

“Only when bioenergy results in additional carbon being sequestered above and beyond the anticipated baseline (the “business as usual” trajectory) can there be a justification for concluding that such energy use results in little or no increase in carbon emissions.”

What that means is that only biomass that is carefully chosen, grown responsibly, and efficiently converted into energy can reduce carbon pollution and other emissions compared to fossil fuels.

Second, the SAB offers a blunt critique of EPA’s regional approach to assessing the carbon impacts of bioenergy, concluding that it is scientifically unjustified. In its draft Accounting Framework, the EPA proposes to adjust the carbon emissions of large, biomass-burning facilities by a regional “Biomass Adjustment Factor” based on an assessment of forest stocks in the region where the facility is located. This approach, according to the SAB, is a “central weakness of the Framework” and “leads to the nonsensical conclusion that a ton of carbon emitted in one part of the country may be treated differently from a ton of carbon emitted elsewhere.”

We agree.

If applied, this type of regional approach would mean that a power plant burning whole trees from a given region would have zero “net biogenic emissions” as long as total tree harvesting in that region doesn’t exceed annual forest growth. Yet, from the perspective of the atmosphere, eliminating a carbon sink has the same impact as creating an equivalent-sized smokestack. So plants burning biomass cannot be given credit for forest growth and carbon sequestration that would be happening anyway without increasing net carbon emissions to the atmosphere. Not only would this approach create perverse incentives for investors and land-owners, but it ignores the actual ways in which bioenergy producers can affect carbon emissions: by choosing low-carbon feedstocks from lands that are sustainably managed and using efficient conversion technologies to turn that biomass into electricity.

Third, the SAB ~~recommends that EPA apply~~ points EPA towards a “categorical inclusion” approach for power plants burning whole trees and other long carbon recovery feedstocks. Under such a system, 100% of the carbon emitted at biomass burning facilities would be counted, with the burden of proof resting with power plants to demonstrate any additional carbon sequestration they wish to be credited for. This reaffirms the principle of starting with full carbon accounting for the vast majority of biomass and resists the notion that we should be giving large biomass-burning facilities carbon credit “on spec” for biomass regrowth they claim will happen in the future.

Bottom line?

Asked by EPA, “Is [the draft Framework] scientifically rigorous?”, the SAB’s response could not be clearer: “The SAB did not find the Framework to be scientifically rigorous.”

As we here at NRDC have done, the SAB calls on EPA to abandon the Framework in favor of an accounting system that would be simpler to implement and could accurately assess the climate impact of burning biomass. It suggests that EPA give credit to facilities burning biomass that falls into short recovery feedstocks—things like agricultural residues, perennial herbaceous crops, mill wood wastes, and other wastes where carbon recovery and “anyway” emissions are within one to a few years—but require that emissions from all other types of biomass be fully counted at the smokestack. Facilities wishing to claim carbon credit for burning biomass would then have to demonstrate that the biomass they’ve sourced has actually resulted in a reduction in carbon emissions to the atmosphere.

The SAB offers two options for doing so: sustainable certification and carbon offsets. On its own, sustainable certification does not tell us about the carbon impacts of any source of biomass. And for its part, crediting carbon for completely unrelated projects meant to offset emissions from the smokestack would only add an additional layer of complexity and uncertainty into the system, given the challenges of ensuring that offset credits represent real, additional, and verifiable carbon sequestration.

However, certification coupled with rigorous carbon sequestration accounting could be used to assess the carbon impacts of specific biomass feedstocks sourced from specific landscapes. Critically, this would mean a system that credits only sequestration above and beyond what would have happened anyway on the landscape from which the facility is sourcing biomass—for example, through management changes that result in greater biomass growth or new tree plantings where trees otherwise would not be growing—and has mechanisms in place to account for emissions leakage to other landscapes, as well as the risk of reversal.

We need a regulatory system that links emitter behavior directly to what’s happening on the landscape, putting in place the necessary market incentives to encourage bioenergy facilities to source low-carbon biomass and burn it efficiently. The SAB’s draft report is correct in concluding that EPA’s Framework fails to offer a scientifically rigorous and workable approach to regulating biogenic carbon. NRDC applauds the SAB’s work to date in reinforcing key scientific principles in biomass carbon accounting and urges it to further elaborate effective approaches for implementing these principles.

Frugal Feasts get fancy!

2012-01-17T18:38:47Z

Sasha Lyutse, Policy Analyst, New York

Last weekend, my fellow Frugal Feasters and I took part in the fanciest Feast yet. This time, our host really raised the technical difficulty bar!

His menu reads like something straight out of a posh restaurant:

Mushroom and onion bruschetta on homemade peasant bread (baked in a Dutch oven)
Roasted beet salad with honey mustard vinaigrette
Polenta with sundried tomatoes and sautéed spinach
Fresh, hand-made ravioli stuffed with a puree of three winter squashes

Amazingly, for the third time in a row, the Feast came in under budget, serving 12 people for only $55.

And here’s the other exciting thing. Our host is not a vegetarian or vegan. And my guess is that the idea of cooking a meat and dairy free meal—that would also taste good and impress his guests—was somewhat daunting at first, particularly in the dead of winter (see my previous post about my experience shopping the farmers market in December). But not only was his meal gorgeous—just check out all these colors—but filling, delicious, and healthy.

To me, this is one of the key lessons of our little experiment with Frugal Feasts: $5 dollar per head dinners that are well-balanced, made from ingredients that are organic, low on the food chain, and supportive of local farmers.

As Mark Bittman wrote in his recent NY Times piece, Americans are eating less meat—and for the right reasons. Yes, many of us are tightening our belts all around, and more and more people are realizing just how much they can save on their weekly grocery bills by reducing purchases of meat. But things like “Meatless Mondays” have also become a cultural force, and more and more Americans are significantly cutting their meat consumption for health reasons, as well as a greater awareness of the environmental benefits of switching to lower-impact forms of protein.

Bittman cites the rise of “flexitarianism”—an eating style that reduces the amount of meat without “going vegetarian” — as one of the top consumer health trends for 2012. I’m not one for labels, but this is a label I can get behind because it eschews the typical divisions between meat eaters, vegetarians, and vegans.

The fact is, what we eat matters. The food choices we make have a big impact on the environment, workers throughout the supply chain, rural communities, and millions of animals. And eating less meat is one of the most impactful things we can do to reduce our personal "foodprint".

The empowering thing is that deciding what to eat is a choice we get to make three times a day. You don't have to make a lifetime commitment to veganism. Even small changes in what we buy and eat can add up to real benefits to our health, as well as the health of the environment, including fewer toxic chemicals, reduced carbon pollution, and healthier soils and waterways. They can also mean less animal cruelty and greater welfare for the people who produce our food.

So whether it's once a day, once a week, or once a month, feasting frugally makes a difference. To read about the original post that inspired Frugal Feasts, see Bittman’s piece Share Meals, Shared Knowledge. For more on SlowFood USA’s $5 Challenge, check out their Tips, Tricks & Challenges page. And as always, please share your frugal recipes here!

Out with the old, in with the new; bidding farewell to the corn ethanol tax credit

2011-12-23T19:13:40Z

Sasha Lyutse, Policy Analyst, New York

I turn 30 this weekend. That means that for my whole life, the corn ethanol industry has been receiving federal subsidies. From the Energy Tax Act of 1978, which gave ethanol its first tax exemption, to the American Jobs Creation Act of 2004, which put in place the Volumetric Ethanol Excise Tax Credit known as the VEETC, every gallon of corn ethanol produced over the last three decades has directly benefitted from taxpayer support in one form or another.

That ends at midnight on Saturday, December 31st when the VEETC will finally expire, along with the tariff on imported ethanol.

Not only is this a major victory for American taxpayers, who have been stuck with the multi-billion dollar bill for a tax credit we’ve long known doesn’t create any additional domestic ethanol production or jobs, but it marks an important turning point in righting our biofuels policies.

The vast majority of Americans think we need clean and renewable alternatives to dirty and limited fossil fuels. Instead of investing billions in the dirty biofuels of the past, we can now begin a rational discussion about the policies we need to commercialize real, low-carbon and sustainable alternatives to oil—alternatives that we can produce right here in the U.S. and that will never run out.

Two years ago, the conventional wisdom was that that Big Ethanol was too powerful to take on and would get the VEETC extension it was lobbying for. But that didn’t stop a large and diverse coalition from pushing back, calling out corn ethanol’s polluting record, its role in driving up food prices, and the wastefulness of paying oil companies to blend corn ethanol into our gasoline when federal mandates already require them to do so. It didn’t hurt that study after study came out showing just how much corn ethanol subsidies were costing us and just how little we were getting in return, or that the industry itself finally began to admit what we already knew: that corn ethanol was a mature technology that didn’t need anymore subsidies.

It’s actually fairly amusing to take a page out of Jon Stewart’s book and contrast industry statements from 2010—when corn ethanol lobbyists were issuing dire warnings that equated ending the VEETC with “pushing the industry off a cliff”—with statements over the last few months, as corn ethanol proponents pulled a sharp 180 and started telling anyone who’d listen just how much they didn’t need or want the VEETC.

Here’s Renewable Fuels Association President Bob Dinneen in July of 2010:

“Now is not the time to add uncertainty and complexity to the energy tax debate. Because the EPA has failed to act to allow higher level ethanol blends, margins in the industry are razor thin. Losing the tax incentive now will shutter plants and cost tens of thousands of jobs.”

And here’s American Coalition for Ethanol Executive Vice President Brian Jennings on that same day:

“If Congress fails to extend ethanol tax incentives beyond 2010, more U.S. jobs will be lost and energy independence will be reversed, two dangerous consequences that America cannot afford.”

Compare that to the industry’s current spin, like this statement from Poet CEO Jeff Broin just a few weeks ago:

"Ethanol is now able to compete with gasoline without a tax break…Today, ethanol is so competitive that we have become a major exporter, even to Brazil."

And the National Corn Growers Association last month:

“VEETC expires about a month from now, and corn growers and the ethanol industry have long agreed to let it expire and have since stopped fighting for its renewal...Frankly, we left this game last quarter because there are other, smarter ways to support ethanol, especially in today’s deficit-prone political world.”

You’d almost think someone forced them to spend millions lobbying for a VEETC extension!

But in these partisan times, nothing spoke louder than a 73-27 vote in the U.S. Senate to end both the VEETC and import tariff. The message was clear: American taxpayers can no longer afford to line the pockets of big oil companies and old corn ethanol plants while getting nothing in return but dirtier air, dirtier water, and higher prices at the grocery store.

The VEETC subsidized the best and worst gallons of ethanol alike, with no environmental performance requirements. This was not only wasteful, but came at the expense of developing the new and cleaner biofuels we need. To get the first billion gallons of advanced biofuels to market, we’ll need the right mix of policies that support the production of responsibly-grown energy crops, reward producers for creating biofuels that protect our climate and natural resources, and ensure that rigorous sustainability standards and verification systems are integrated into corporate and government biofuels purchasing contracts.

We can and must move beyond corn ethanol. Ending the VEETC means we’ve taken the first critical step in that direction. For more on where we need to go from here—and how NRDC thinks we can get there—check out my colleague Nathanael Greene’s blog.

Another Frugal Feast: more good friends & good food for $5 a head!

2011-12-22T17:45:53Z

Sasha Lyutse, Policy Analyst, New York

I wrote last month about how my friends and I decided to take up Slow Food USA’s $5 Dinner Challenge. Once a month, we’d gather for a home-cooked dinner that was well-balanced, including a protein, dark leafy green and a whole grain, low on the food chain, and made from organic, local ingredients.

The challenge? Our host could not exceed $5 per person in making the meal.

The inspiration? An opportunity to come together around a simple principle: that “slow food”—or simply real food, as I like to think of it— is good for its eaters, its producers and the environment, and is not only a better alternative to fast food, but also a less expensive one.

This month it was my turn to shop, cook and host the feast—and a feast it was!

Buying local and seasonal food during a New York winter is tough. My favorite farmers market goes from overflowing with vibrant greens and fresh fruits and veggies of every shade of the rainbow to a more modest set of vendors selling mostly root vegetables and piles of every kind of apple and pear variety.

But those same root veggies make for some of the most nutritious and comforting winter foods, so I quickly found my stride.

With a whopping total of 13 feasters, I had a $65 dollar budget. Here’s what I came up with:

Creamy potato leek soup, with fresh rosemary (the most local ingredient of all: from my neighbor's balcony garden!)
Cumin and vinegar black beans
Yellow, orange, and purple carrots roasted simply with olive oil and sea salt
Garlic collard greens
Barley
Bosc pears with oatmeal crumble for dessert

Cooking for that many people was definitely a challenge—so much so that we’ve since instituted an attendance cap of 10 guests!—but it’s also a wonderful experience to bring together so many good friends around so much good food at this special time of year.

So Happy Holidays and here’s to many more delicious, nutritious, and sustainable feasts to come!

Taking up Slow Food USA's $5 Dinner Challenge with Frugal Feasts!

2011-11-16T18:46:25Z

Sasha Lyutse, Policy Analyst, New York

So much is being written about food these days, it’s hard to keep up. But one recent OpEd by NY Times columnist Mark Bittman really jumped out at me. In the post called Shared Meals, Shared Knowledge, Bittman echoes a challenge issued by the organization Slow Food USA: the $5 Challenge. He calls on people to cook pot luck and community dinners for no more than $5 per person.

The goal? To show that buying normal ingredients from a regular grocery store and cooking them at home is cheaper than going out to eat or eating fast food and to help support healthy, sustainable, and affordable food—what he calls, quite simply, “real food”.

$5 bucks. Doesn’t seem like much. In fact, I have trouble thinking of many things you can buy these days for just $5 dollars. But my friends and I decided to take up the challenge. After all, it’s getting colder and what better way to catch up than around some home cooked meals?

We call it “Frugal Feasts” and here’s how it works:

Each month, someone volunteers to shop, cook, and host a dinner, striving to create well-balanced meals from ingredients that are organic, low on the food chain, and supportive of local farmers. The night of the dinner everyone brings $5 bucks to pay the host back and then we feast! Alcohol is BYOB and dessert is optional.

What we were hoping to do was simple: eat delicious food with good friends, save some money, support local farmers growing good food in responsible ways, and maybe learn something in the process. And our very first Frugal Feast last week didn’t disappoint.

Nine people participated, so at $5 dollars a pop our hostess had $45 dollars to work with. What did we get for that kitty? A veritable autumnal bounty:

Spicy toasted pumpkin seeds to snack on
2 loaves of freshly baked peasant bread
Delicious pumpkin coconut curry soup
Roasted acorn squash, carrot, brussel sprout and French lentil salad
Garlic kale
Poached apples with cinnamon for dessert

And the hostess even had leftovers!

So why does any of this matter?

We know our food system is badly broken. Our government now spends billions to subsidize commody grains like corn, 40% of which goes towards producing dirty corn ethanol instead of food or feed. Processed foods and industrially produced meats from animals raised in cruel and dirty confined animal feedlot operations (CAFO’s) are made artificially cheap by these subsidies, though we bear the costs in pollution to our waterways, air, and climate, and in substantial impacts to our health, such as rising resistance to antibiotics.

While we waste 40% of all edible food in the U.S., many of our underserved communities no longer have access to fresh food, and instead are sustained by heavily processed food. Epidemics of obesity and diabetes in the U.S. today are a major social justice issue with enormous public health costs and repercussions. Americans now spend just 7% of our budget on food, the lowest of any country in the world. At the same time, our spending on healthcare has exploded, accounting for 17.4% of national GDP in 2011, by far the highest share in the OECD, and almost eight percentage points higher than the OECD average of 9.5%.

Many of us are awakening to the price we pay for the industrialization of food production and are seeking food that is healthier for ourselves, our families, and our planet. And it’s not just individuals taking up the mantle of better food. New York City has taken notice, enacting a new package of laws that will help increase the amount of fresh, local food available in the city.

How we make the transition to a healthier food system is the subject of thousands of conversations, but participating in the Slow Food challenge is one way you can organize your own conversation with family and friends.

For more information and great $5 meal ideas and recipes, check out SlowFood USA’s challenge website. And if you have recipe ideas or just want to share your own experiences cooking frugally with friends, please share them here!

New NRDC video animation shows risks of burning trees for energy

2011-09-07T17:58:30Z

Sasha Lyutse, Policy Analyst, New York

Our forests work hard for us every day, absorbing and storing vast amounts of carbon. This makes forests one of our best defenses against global warming, one we Americans rely on to offset 13% of our annual greenhouse gas emissions each year.

Unfortunately, power companies are increasingly turning to our forests for fuel, and they try to get away with it by claiming that trees are a “sustainable” and “carbon neutral” source of biomass. But trees are not the same as perennial grasses or harvest residues that can either regrow quickly, would otherwise be burned in the field, or are not needed for other purposes. We need trees. And we need full grown trees because saplings require decades of care before they can absorb the same amount of carbon dioxide as full grown trees.

As if that weren’t reason enough, the science is also clear that harvesting and burning whole trees for energy will result in as much if not more carbon emissions than burning coal for decades. But our policies have all too often not kept pace with science, and EPA’s current policy fails to differentiate between the good, the bad, and the ugly when it comes to biomass and threatening our forests.

Let’s dig a little deeper: power companies and the forest industry sell the idea of burning trees as a renewable alternative to fossil fuels like coal with a simple argument: Trees grow back, right? So how can burning trees not be better in terms of carbon pollution than burning coal?

I briefly explained the answer up above, but to fully understand it requires an explanation of the forest carbon cycle— not exactly most peoples’ idea of a good time. To help make what can be a wonky issue a bit more accessible, NRDC is releasing a new fact sheet today, along with a video animation showing what happens to the balance of carbon between and forest and the atmosphere when we burn forests to produce energy instead of allowing them to keep their day jobs—as massive carbon storage facilities.

As the video shows, just like coal, when trees are burned in power plants, the carbon they have accumulated over long periods of time is released into the atmosphere. But unlike coal, trees will continue to absorb carbon if left alone. So burning forests for energy not only emits a lot of carbon, but also degrades our carbon sinks. Taken together, this creates a “carbon debt”—an increase in carbon pollution over the fossil fuel alternative—and forests can take decades to repay this debt, even if they are replanted immediately and managed carefully.

NRDC believes we must quickly transition from burning dirty fossil fuels like coal for energy to renewable resources like wind, solar, and low-carbon sources of biomass that can scale up sustainably and deliver real carbon savings. We cannot afford to wait multiple decades for biopower systems to start delivering carbon benefits.

But burning the worst forms of biomass, such as whole trees, will take us in the wrong direction, increasing carbon pollution at a time when we can least afford to. To avoid this, we need policies that differentiate between biomass that delivers carbon benefits soon—for example, sustainably produced energy crops like switchgrass grown on non-forested land—and unsustainable forms of biomass, like whole trees. Only biomass that is carefully chosen, grown responsibly, and efficiently converted into energy can reduce carbon pollution and other emissions compared to fossil fuels.

For more information and to tell Congress that our forests aren’t fuel, go to: http://www.nrdc.org/energy/forestsnotfuel/ .

New EPA E15 label won't keep higher ethanol blends from polluting our air

2011-06-29T01:17:51Z

Sasha Lyutse, Policy Analyst, New York

Today, the Environmental Protection Agency issued labeling requirements for fuel pumps dispensing E15—a blend of gasoline that contains up to 15% ethanol. This announcement follows up on EPA’s expansion earlier this year of a partial waiver allowing E15 to be used in all cars and trucks made after 2001. The new label cautions consumers not to use the fuel in vehicles older than model year 2001, motorcycles, watercraft, and other gasoline-powered equipment, and even warns that doing so is against the law.

Why are these types of warnings necessary? Because using E15 in these vehicles, which are not fitted with technologies that help them adapt to ethanol’s corrosive impacts on tailpipes, risks increasing toxic tailpipe emissions, with serious impacts on the air we breathe.

Given the magnitude of the threat to public health and the environment of E15 blends, relying on consumer labels at gas stations is a hopelessly inadequate response.

A broad coalition of groups, from environmentalists to public health advocates to automakers, has long opposed this increase in blend limits, citing serious environmental and public health concerns about toxic air pollution emitted from the tailpipes of vehicles that run on gasoline blended with ethanol, especially at higher blend levels like E15, and skepticism about EPA's ability to prevent misfueling.

EPA’s response has been to focus on developing the kind of label it rolled out today. According to EPA, the label will:

“…help to further reduce the risks of potential misfueling that could result in damage to the vehicle or equipment and in associated emission increases that pose threats to human health and the environment.”

As we discussed here, such statements demonstrate that EPA knows E15 is unsafe, more polluting and corrosive for many vehicles in the marketplace, and that the agency is responsible for protecting the public from this pollution by keeping E15 blends out of these vehicles.

But the fact is, regardless of any label EPA may require on E15 pumps, some percentage of the public will certainly misfuel using E15. EPA knows this and so does the corn ethanol industry, which has been pushing hard for a liability waiver for oil companies and retailers that would protect them from ethanol-related lawsuits when drivers inevitably fill their tanks with the wrong fuel.

We need smart energy policies that speed our transition to the newer, cleaner advanced biofuels we need, not policies that lock more old, dirty corn ethanol into our fuel market. Two weeks ago, the U.S. Senate sent a powerful message when it voted, with overwhelming bipartisanship, to end the main corn ethanol tax credit and ethanol import tariff. Now is the time for the administration to heed this call and help move us beyond corn ethanol.

Simple analysis puts RFA's inflated claims in perspective

2011-06-10T01:11:50Z

Sasha Lyutse, Policy Analyst, New York

In a post earlier this week, I talked about the Renewable Fuels Association’s new ad campaign in Washington D.C. promoting corn ethanol on the basis that it reduces gas prices. The claims in that ad—namely that ethanol reduced the average American household’s gasoline bill by more than $800 and that gas prices could rise by as much as 92% in the absence of ethanol—seemed especially exaggerated to us here at NRDC, given our own analysis of the costs and benefits of corn ethanol to American drivers.

As a follow up to that post, I wanted to provide some more detail on how we arrived at our estimates, given that we as taxpayers subsidize the domestic corn ethanol industry to the tune of $6 billion per year through the Volumetric Ethanol Excise Tax Credit or “VEETC”, which pays oil companies $0.45 cents for every gallon of corn ethanol they blend into our gasoline supply.

My earlier post referred to an analysis by Hart Energy Consulting, which does a lot of great and complex analysis, but the figures I cited are just basic math:

We’re currently close to getting about 10% of our light-duty vehicle fuel from ethanol, so we’re well beyond the specialty value that ethanol provided when we were only getting a small percentage of our fuel supply from ethanol. So when ethanol and gasoline are competing just on their volume value, we can assume that during periods when ethanol is cheaper than gasoline (i.e. the blending margin is positive), there is excess supply of ethanol and the oil companies can pocket more of the VEETC value. Conversely, when ethanol is more expensive than gasoline, ethanol supply is tight and ethanol producers are able to extract more of the VEETC value.

Based on 2009 relative prices for ethanol and gasoline, we estimated that roughly 25% of the VEETC value for the year went to ethanol producers, while the rest went to oil companies. We then assumed that half of what went to oil companies was passed through to consumers via reduced gas prices at the pump. This translated, on average, to $0.17 cents per gallon of ethanol or $0.017 cents per gallon of E10, a blend of 10% ethanol and 90% gasoline.

Next we factored in a “BTU penalty” of 2.5% to account for the hit on mileage drivers see because gasoline blended with ethanol has a lower energy content than gasoline made of all hydrocarbons, meaning drivers using E10 have to buy more gasoline overall to drive the same distance. On average, we calculated this penalty to be about $0.06 cents per gallon based on the average retail price of gasoline in 2009.

Month	CBOT ETHANOL Avg	CBOT Ethanol Net VEETC	NYMEX RBOB Gasoline	Blending Margin	Driver Benefit Per Gallon Ethanol	Driver Benefit Per Gallon E-10	US Avg Retail Gasoline Price 2009	Consumer BTU Penalty Per E-10 Retail Gallon
January	$1.61	$1.27	$1.15	-$0.12	-$0.06	-$0.006	$1.79	$0.04
February	$1.57	$1.23	$1.18	-$0.05	-$0.02	-$0.002	$1.92	$0.05
March	$1.56	$1.22	$1.39	$0.17	$0.08	$0.008	$1.96	$0.05
April	$1.57	$1.23	$1.44	$0.21	$0.10	$0.010	$2.05	$0.05
May	$1.69	$1.35	$1.74	$0.38	$0.19	$0.019	$2.27	$0.06
June	$1.73	$1.39	$1.95	$0.56	$0.28	$0.028	$2.63	$0.07
July	$1.55	$1.22	$1.80	$0.58	$0.29	$0.029	$2.53	$0.06
August	$1.59	$1.25	$2.02	$0.77	$0.38	$0.038	$2.62	$0.07
September	$1.63	$1.30	$1.76	$0.46	$0.23	$0.023	$2.55	$0.06
October	$1.89	$1.55	$1.90	$0.35	$0.18	$0.018	$2.55	$0.06
November	$2.00	$1.67	$1.98	$0.31	$0.15	$0.015	$2.65	$0.07
December	$1.92	$1.58	$1.93	$0.35	$0.17	$0.017	$2.61	$0.07
2009 AVERAGE	$1.69	$1.36	$1.69	$0.33	$0.17	$0.017	$2.34	$0.06

Finally, we calculate what this translates to in benefits and costs to U.S. drivers. For this we take the Energy Information Administration’s estimate of total gasoline demand in 2009 and, controlling for average ethanol penetration across the country (roughly 70%), divide by the U.S. Census Bureau’s estimate of U.S. licensed drivers.

Average Benefit Per Driver	Average BTU Penalty Per Driver	Net 2009 Driver Impact
$7.79	-$27.55	-$19.76

We find that on average, a U.S. driver saw $7.79 in benefit from having corn ethanol blended into our gasoline supply in 2009, but was hit with a $27.55 BTU penalty. The net result was that the average driver was actually penalized $19.76. (I actually reported this incorrectly on Tuesday when I said the benefit was $8.76 on average and the penalty was just $14.88).

These assumptions are simple and may be off by a little bit, but they’re a heck of a lot more realistic than assuming that all the ethanol will suddenly disappear. This simple analysis (see our spreadsheet here) shows just how inflated RFA’s claims are and how desperate the corn ethanol industry is in the face of mounting bi-partisan political opposition to corn ethanol subsidies.

RFA makes more exaggerated claims in new corn ethanol ads

2011-06-07T16:18:36Z

Sasha Lyutse, Policy Analyst, New York

UPDATED June 8th to correct an error made in the original post.

I wrote last week that we could soon expect the corn ethanol industry, faced with growing bipartisan calls to end corn ethanol subsidies, to start playing on consumer fears about rising gas prices and arguing that we need more corn ethanol because it reduces the price of gasoline at the pump. So arriving in Washington, D.C. this morning, I wasn’t at all surprised to see that the Renewable Fuels Association (RFA), one of the largest corn ethanol lobby groups, had rolled out a new ad campaign in the D.C. Metro. The new ad claims, amongst other things, that ethanol reduced the average American household’s gasoline bill by more than $800 and that if ethanol disappeared, “gas prices could rise by as much as 92%.”

~~RFA doesn’t cite the source of their numbers in their ad so there’s no way to trace their claims, but~~ It’s not difficult to see that these claims are wildly exaggerated.

Under the Renewable Fuel Standard (RFS), oil companies are required to blend increasing amounts of corn ethanol into U.S. transportation fuels every year. On top of that, the federal government provides these oil companies a tax credit—known as the Volumetric Ethanol Excise Tax Credit or “VEETC”—for every gallon of ethanol blended with gasoline. Under the current VEETC, valued at $0.45 per gallon, American taxpayers spend roughly $6 billion per year subsidizing corn ethanol by essentially paying oil companies to obey the law.

So who benefits from these billions in subsidies? Depending on the price of ethanol relative to the price of gasoline—which affects the blending margin for oil companies—oil companies are able to pocket more or less of the VEETC (the rest goes to the ethanol producers themselves). Oil companies can then pass some of that value through to drivers in the cost of gasoline at the pump. But what’s clear is that American drivers are not at the top of the beneficiaries list.

An independent analysis by Hart Energy Consulting looked at the costs and benefits to taxpayers and drivers of continuing to subsidize corn ethanol with the VEETC. They found that the average benefit to U.S. drivers nationwide in 2009 was $8.76 on average—a far cry from the $800 benefit per household that RFA’s new ad claims. But because the mileage of gasoline blended with ethanol is approximately 2-3% lower than regular gasoline (ethanol blended gasoline has a lower British Thermal Units (BTU) content than all hydrocarbon gasoline), any benefit must be compared to the costs drivers incur from having to buy more ethanol-blended gasoline overall. Once this “BTU penalty” was taken into account, Hart found that there was no benefit to drivers at all in 2009. In fact, on a nationwide basis, the average driver was actually penalized $14.48 as a result of corn ethanol subsidies.

RFA’s ad is just the industry’s latest cynical attempt to try and reverse the rising tide of opposition to corn ethanol subsidies. But it doesn’t change the facts. The VEETC is redundant, wasteful and doesn’t benefit American taxpayers, drivers or the environment. There’s simply no rationale for continuing the VEETC any longer. This is a waste of very scarce resources that would be far better devoted to ensuring that we make the transition to sustainable advanced biofuels.

Inhofe bill seeks shift away from old corn ethanol but would have unintended consequences

2011-06-02T01:02:28Z

Sasha Lyutse, Policy Analyst, New York

There aren’t many things NRDC and Senator James Inhofe of Oklahoma agree on, but the need to shift biofuels incentives towards newer, cleaner advanced biofuels is one. Last week, Senator Inhofe introduced legislation that would broaden the Renewable Fuel Standard (RFS) definition of cellulosic biofuels to be technology neutral and include biofuels made from feedstocks such as algae. We agree with Senator Inhofe’s goal of moving away from corn ethanol towards the next generation of biofuels. Unfortunately, the bill as written would open the RFS pool reserved for “advanced biofuels” to non-ethanol corn starch based fuels and biofuels made from other conventional feedstocks. By doing so, it would have the unintended consequence of incentivizing the production of even more corn-based biofuels and dampening innovation in the biofuel industry.

The RFS requires 36 billion gallons of biofuels to be consumed annually in the U.S. by 2022, of which 15 billion gallons can be met with corn ethanol. The rest must come from “advanced biofuels”, of which 16 billion gallons must be produced from cellulosic materials.

The Inhofe bill would change the 16 billion gallon cellulosic mandate to a “next generation biofuels” mandate that can be filled with any non-ethanol fuel that achieves a 60% lifecycle reduction in greenhouse gas emissions compared to gasoline. This means that non-ethanol corn starch-based fuels such as biobutanol, all biodiesel feedstocks like palm and soy, as well as sugarcane feedstocks, would all qualify.

Biofuels made from conventional feedstocks such as corn don’t need any more support. These cheaper, more mature biofuels could quickly squeeze out the new and truly innovative technologies that the RFS advanced biofuels mandate is intended to bring to market.

Through the creation of different technology “bins”, the RFSII seeks to couple incentives for better environmental performance with support geared specifically towards the newest, most innovative biofuels with the best potential to scale up. In other words, the goal of the cellulosic mandate is not just to achieve a 60% reduction in GHG’s. It is just as much about commercializing a set of biofuels that can scale in much more environmentally responsible ways. Adding algae into this bin makes sense. Adding a lot of already mature conventional biofuels would just pull the rug out from under the companies trying to achieve this ultimate goal.

New study & deforestation spike show need for "no-go" zones in biofuel crop production

2011-05-25T23:09:57Z

Sasha Lyutse, Policy Analyst, New York

Last week, Conservation International (CI) released a new study that examines ways biofuels can be produced without threatening biodiversity or food security. CI used spatial mapping to identify overlap among potential biofuel crop cultivation zones and areas of high biodiversity, ecosystem services, and staple food crop production. The analysis, funded by the U.S. Department of Energy, was global in scope with an additional focus on the upper Amazon Basin. The study’s objective is to provide decision-makers in the public and private sectors with information and concrete tools to assess where the cultivation of biofuel crops might negatively impact carbon sequestration, water systems, and biodiversity habitat. The study also points to areas where biofuel crops could interfere with the production of staple crops and, in contrast, where biofuel crops could be produced without negative consequences.

The study came out on the same day as reports from Brazil’s national space research institute of a new spike in deforestation in the Brazilian Amazon rainforest. The institute’s satellite images show a 27% jump in deforestation between August 2010 and April 2011, with the biggest increase in the state of Mato Grosso, which produces more than a quarter of Brazil's soybean harvest.

CI’s study underscores the need to erect an economic and regulatory "fence" around the carbon- and biodiversity-rich natural ecosystems of the world, just as this unfortunate news out of Brazil once again sounds an alarm about the immense pressures the world’s most ecologically valuable lands are under and the importance of strong forest safeguards.

These developments also force us to once again examine the complex, market-driven effects our policies are having on land use around the world. Many factors are contributing to deforestation in Brazil, including Brazil’s enforcement of its own Forest Code. Biofuels mandates in the U.S. and other industrialized countries are among them. The rapid growth of the U.S. corn ethanol industry—and the impact this growth has had on many U.S. farmers’ decision to shift from growing soy to growing corn—has contributed to increases in soy prices and the expansion of soy production in places like Mato Grosso.

The U.S. corn ethanol industry and its proponents have argued that because U.S. soy exports haven’t decreased, this means there is no link between corn ethanol production and international deforestation. But, as we discussed here and here, these arguments focus exclusively on the supply side of corn and soy markets and don’t actually tell us anything about what U.S. soy exports would have been had U.S. biofuels mandates not been in place to drive the expansion of the corn ethanol industry. They therefore tell us nothing about what the impacts of these policies actually are on what is commonly referred to as “indirect land-use change” or ILUC.

The fact is that our bioenergy policies are having far-reaching, unintended impacts around the world. CI’s approach is valuable because it goes beyond simplistic estimates of the technical production potential of biofuel crops to identify priority areas for biofuel investment—areas where bioenergy crop cultivation has the potential to benefit local economies without risking the destruction of valuable ecosystems like Brazil’s Amazonian rainforest— as well as “no-go” areas of high conservation importance to be put off limits to bioenergy crop production. It is critical that our energy policies limit government support to biofuels produced in these types of “no-go” areas. What we need are smart energy policies that reward the lowest carbon and most sustainable fuels coupled with strong, well-enforced laws that protect our natural, biodiverse ecosystems and their stores of carbon.

Bipartisan Senate bill would end wasteful corn ethanol subsidies this summer

2011-05-03T21:20:53Z

Sasha Lyutse, Policy Analyst, New York

Today, Senators Dianne Feinstein and Tom Coburn have joined forces across the aisle to introduce legislation that will completely eliminate the main corn ethanol tax credit—known as the Volumetric Ethanol Excise Tax Credit or “VEETC”—before year-end, as well as end the import tariff on foreign ethanol. Their effort speaks to the strong bipartisan consensus on ending subsidies to old, polluting corn ethanol, will save taxpayers billions, and finally force the mature corn ethanol industry to compete in the marketplace after three decades of government support.

As we’ve written about extensively, the VEETC is wasteful and redundant, paying oil companies billions in scarce taxpayer dollars each year—nearly $6 billion this year alone—to blend more and more ethanol into our gasoline supply, despite the fact that they are already required to do so by law. In exchange we’ve gotten little in additional domestic ethanol production or jobs. And because the VEETC was not tied to any environmental performance requirements, subsidizing the best and worst gallons of ethanol alike, these billions have come at the expense of developing the new and cleaner advanced biofuels that we need.

Corn ethanol lobbyists used to sell ethanol as a bridge to these better fuels, but now they try to dismiss them as fantasies making it clear they’re not really interested in competition.

With rising oil prices, we can now expect these same lobbyists to argue that we need more corn ethanol because it reduces the price of gasoline at the pump. But with corn prices breaking records, this impact is marginal at best. And it is certainly not worth billions in subsidies, the costly air and water pollution that corn production results in, or the ethanol industry’s devastating impacts on global food prices.

To get biofuels on the green and narrow path and quickly transition to new, better-performing advanced biofuels, we must first stop investing billions in the dirty biofuels of the past. Ending the VEETC and ethanol import tariff is a critical first step and we applaud Senators Feinstein and Coburn for their leadership.

Next, Congress must resist attempts by the corn ethanol industry to push for what amounts to more government support by a different name—infrastructure investments. Billions in additional giveaways to the corn ethanol industry, whether they come in the form of tax credits or costly loan guarantees for ethanol-specific pipelines and gas station pumps will just lock more old, dirty corn ethanol into the market at a time when advanced biofuels are being developed to drop right into our current fueling system.

Finally, Congressional lawmakers must put in place smart energy policies that reward the best performing biofuels—those that deliver substantial reductions in life-cycle greenhouse gas emissions, improved fossil energy balance, more sustainable farming practices that lead to cleaner water and healthier soils, less effect on food prices, and therefore more energy security. The Greener Biofuels Tax Credit we’ve proposed is one way they could do just that.

NRDC fact sheet lays out biomass basics, campaign calls for action to tell EPA our forests aren't fuel

2011-05-02T17:34:49Z

Sasha Lyutse, Policy Analyst, New York

Today NRDC and our partners are calling on all concerned citizens to learn about the risks of using the wrong types of biomass for energy and to tell EPA not to allow power companies to use the worst types of biomass—whole trees from our forests—as fuel for producing electricity. To help our readers learn more about the topic, we’ve released a new fact sheet on why burning trees for energy is destructive and my colleague Nathanael has written here about ways we can get biomass right and wrong and how you can get involved with today’s campaign on Twitter and Facebook.

If you love forests, please take action by telling EPA not to allow power companies to burn trees for fuel.

In a nutshell, here’s what’s going on:

EPA has clearly stated that “all carbon dioxide counts” towards determining whether large power plants must take reasonable steps under the Clean Air Act to reduce how much dangerous pollution they will put into the air. But powerful corporations in the electricity and forestry industries are pushing EPA to create a loophole in the law to keep emissions from burning biomass from being regulated like the emissions from coal or other fossil fuels.

As we’ve discussed here and here, EPA’s plan to exempt the carbon pollution emitted from plants that burn biomass for the next three years will create a powerful incentive for power plants to shift from burning coal to burning biomass—regardless of the actual impact on our climate. During these three years there will be no federal limits on burning even the worst sources of biomass. And because the supply of truly sustainable, low-carbon forestry wastes is extremely limited, expanding biomass power means burning more whole trees.

Our forests give us so much: habitats for wild animals, fresh air, clean water and places to hike and camp. Burning forests for energy puts all these valuable services in jeopardy and can contribute more to global warming and toxic air pollution than using even the dirty fuels like coal. That’s because just like coal, when trees are burned, the carbon they have accumulated over long periods of time is released. But unlike coal, living and growing trees continue to absorb carbon from the atmosphere if left alone. So burning trees means destroying valuable carbon sinks.

Now is the time to tell EPA that we support their authority to enforce Clean Air Act standards to reduce carbon pollution that harms human health and the environment, but that giving emissions from biomass energy sources a free pass and letting power companies mine our forests for fuel is unacceptable.

We here at NRDC delivered this message to EPA at a public hearing held earlier this month. Now it’s your turn. To take action, go to NRDC’s action center and tell EPA that our forests aren’t fuel.

Vilsack champions cover crop biomass, NRDC report lays out path to doing it right

2011-04-18T22:08:05Z

Sasha Lyutse, Policy Analyst, New York

The world is currently experiencing the second surge in global food prices in three years, leading to food shortages and political unrest in many regions. With media and governments increasingly scrutinizing the causes of volatility in world food markets, it’s not surprising that Congress asked Secretary of Agriculture Tom Vilsack to testify last week on U.S. biofuels mandates and their effects on food prices. Vilsack’s comments seemed, unfortunately, to come straight from the corn ethanol industry’s talking points, but he did use the opportunity to raise awareness about the ways in which we can produce more biomass for things like biofuels without competing with our food supply.

Calling for more conversations about a “redesign of the agricultural production systems in this country”, Vilsack cited double, or cover, cropping— the practice of planting a second crop in coordination with a main crop—as one practice America’s farmers can employ to produce biomass for bioenergy without diverting crops from food and feed markets. [Vilsack’s statements got some positive coverage in corners such as The Progressive Farmer’s ag policy blog].

NRDC released a report last month called Second Harvest: Bioenergy from Cover Crop Biomass, which argues that if done carefully, cover crops harvested for bioenergy production could provide extra income to farmers without significantly impacting the amount of land available to grow food crops. Cover crops, the report concludes, could also deliver many environmental benefits, including improved water infiltration in soils; reduced erosion, runoff, and sedimentation; reduced nitrogen leaching; gains in soil organic matter; and enhanced carbon sequestration. These benefits make cover crop biomass an attractive next-generation biomass feedstock.

By contrast, the U.S. corn ethanol industry today uses approximately 40% of our annual corn crop. Vilsack, when pressed on ethanol production’s corn consumption and its impact on food prices, pointed to a myriad of drivers of increased food prices but exempted the corn ethanol industry because of its rising productivity:

“I would say that there are many reasons why there are food shortages globally, but none of them have to do with American farmers and ranchers in a sense that we continue to be extraordinarily productive. Storms, droughts, floods in other parts of the world, export controls that were imposed by other countries, the currency issues, there are a multitude of reasons why we have some of the shortages that we see today in other parts of the globe.”

The Renewable Fuels Association (RFA), a leading corn ethanol industry lobby group, uses the same argument on their blog. U.S. corn ethanol producers, they admit, are using an increasing percentage of the global grain supply. But that supply keeps growing, so, in their view, the fact that the industry now uses 3% of the world’s grains is not significant enough to impact world food prices. The RFA, like the Secretary, point instead to extreme weather events and the impacts of export policies, market speculation, and oil prices, as the real culprits behind soaring food prices.

RFA and Vilsack are indeed correct that a myriad of complex factors all play a role in increasing the tightness of global grain markets. But both fail to acknowledge that it is impossible to segregate the impact of biofuels mandates on food prices from other factors like oil prices or weather because these factors multiply each other—a critical point that biofuels expert Tim Searchinger made in his Washington Post editorial earlier this year, which we discussed here.

The reality is that U.S. biofuels mandates, along with similar mandates in other industrialized countries, population growth, increasing meat consumption, weather shocks, market speculators bidding up the prices of grain futures, and a host of other variables, all affect complex agricultural commodity markets. And perhaps the world’s farmers could keep up if U.S. biofuels mandates were the only factor putting pressure on the supply of food and cropland in today’s grain markets. But taken together, these factors add up to a very tight market where any single shock causes fear, government hoarding, and hunger.

NRDC’s report on cover cropping makes clear that we have the technologies to avoid pitting the need to drive our cars against the need to feed the world's hungry—and that smart bioenergy policies should support those technologies. The report promotes the practice of traditional cover cropping and its environmental benefits, while documenting the benefits and challenges of harvesting cover crops as a source of biomass. It also assesses the various policy incentives that could help scale up the use of cover crops, and recommends research that would help illuminate which planting and harvesting practices could maximize environmental benefits in different cropping systems. The report additionally proposes vehicles for public investment to support the research, development, and demonstration projects that will help identify best practices.

The report clarifies that the cover crop, or mix of crops, that yields the greatest amount of aboveground biomass may not maximize environmental benefits to the water or soil—and there are a host of other trade-offs that must be evaluated when assessing the environmental performance of cover cropping systems. The study concludes that cover cropping for biomass production requires careful evaluation of crop pairings, site-specific soil and climate conditions, and management practices in order to be successful, and that trade-offs are inevitable. Indeed, a key finding states that a holistic approach that considers the way residues of both the main and cover crop are managed is critical to any evaluation of the environmental performance of the overall cropping system. The report concludes that researchers will have to answer these critical questions, evaluating how to simultaneously optimize three factors: yield from the cover crop, yield from the main crop, and environmental benefits. Additional research will need to identify the best crop mixes and to develop best management practices based on location, soil type, climate, and other factors.

Our next step here at NRDC is to profile some farmers employing cover cropping for the purpose of biomass production. Stay tuned!

Talking to NPR about how a Greener Biofuels Tax Credit can take us beyond corn ethanol

2011-04-12T20:53:04Z

Sasha Lyutse, Policy Analyst, New York

Last week, I had the opportunity to speak with NPR’s Mitra Taj for a Living on Earth piece about seeing an end to corn ethanol subsidies this year and the potential to put in place policies that help develop and commercialize better biofuels. In it, we discussed the need to end the costly and redundant Volumetric Ethanol Excise Tax Credit or “VEETC”—the main corn ethanol tax credit worth roughly $6 billion dollar per year—and the opportunity to replace it with a tax credit that pays for real environmental performance, such as the Greener Biofuels Tax Credit we here at NRDC have proposed.

Taj’s story focuses on declining support for the VEETC, driven by a growing coalition with concerns that range from corn ethanol’s polluting record, to its role in driving up food prices, to the wastefulness of paying oil companies to blend corn ethanol into our gasoline when federal mandates already require them to do so, and how Senators from both sides of the aisle are now responding with legislation that would repeal the VEETC.

It also highlights the choice lawmakers now face between policies that would lock more corn ethanol into our market and investments in the cleaner, advanced biofuels we need.

Taj speaks with Michael McAdams, President of the Advanced Biofuels Association, who makes clear that despite corn ethanol industry rhetoric about corn ethanol being “a bridge to better biofuels”, more subsidies for corn ethanol—whether they come in the form of tax credits or massive investments in ethanol-specific infrastructure like new pipelines, special blender pumps, and flex-fuel vehicles—actually come at the expense of better-performing advanced biofuels that are being developed to drop right into our current fueling system with no new cars or pumps needed:

“The corn ethanol industry has made it very difficult for many of the advanced biofuels to have a fair hearing in the political marketplace. For them to draw over $6 billion from American taxpayers and not even have a fair conversation with their colleagues in the advanced industry to suggest we might reallocate some of those resources to expedite commercial building of advanced facilities is a lot like the oil industry used to treat them. And they ought to know better.”

Asked what we can do to shift away from first generation biofuels and realize the promise of advanced biofuels, I told Taj about NRDC’s Greener Biofuels Tax Credit:

“The greener biofuels tax credit that we’ve proposed is actually technology-neutral. It basically just sets performance standards, both in terms of greenhouse gas emissions and other environmental variables that we care a lot about – water use, biodiversity, things like that. So the point is that we have to be tying incentives to real, delivered, measurable, verifiable, environmental performance.”

We can and must move beyond corn ethanol. The first step is putting an immediate end to the VEETC. The next is to begin rewarding producers for creating biofuels that protect our climate and natural resources.