Study questions cost-effectiveness of biofuels and their ability to cut fossil fuel use

Nov 29, 2011

A new study by economists at Oregon State University questions the cost-effectiveness of biofuels and says they would barely reduce fossil fuel use and would likely increase greenhouse gas emissions.

The idea that biofuels can reduce dependency on fossil fuels and mitigate has led governments to promote them as substitutes for gasoline and petroleum-based diesel, using mandates and subsidies, said Bill Jaeger, the lead author on the study.

"Our results suggest that existing biofuel policies have been very costly, produce negligible reductions in fossil fuel use and increase, rather than decrease, greenhouse gas emissions," said Jaeger, a professor in the agricultural and resource economics department at OSU.

Biofuels were initially seen as a solution to energy and , Jaeger said, because the carbon dioxide that's emitted when they're burned is equivalent to what they had absorbed from the atmosphere when the crops were growing. Thus, biofuels were assumed to add little or no to the atmosphere.

But the bigger picture is more complex, Jaeger said, in part because biofuels are produced and transported using . For example, , which is made using natural gas, is used to grow corn for ethanol. Additionally, growing biofuel can push food production onto previously unfarmed land, according to well-documented research, Jaeger said. When this new acreage is cleared and tilled, it can release carbon that accumulated over long periods in soil and vegetation, thus increasing greenhouse gas emissions, he said.

The costs of these side effects tend to be overlooked by policies that focus only on gallon-for-gallon substitutions, he added.

The researchers focused on the major mandated and currently used biofuels worldwide: , biodiesel, cellulosic ethanol from grown in the United States, biodiesel produced in Europe, and sugarcane ethanol produced in Brazil and exported to the United States or Europe.

They evaluated them in terms of their contribution to reducing fossil fuel use and greenhouse gas emissions. They also compared their costs and effectiveness to two alternative policies: an increase in the gas tax and the implementation of energy efficiency improvements.

Their results indicated that all of the biofuel crops were much less cost-effective than the two alternative policies in terms of reducing greenhouse gas emissions and fossil fuel use.

"Each dollar spent on energy improvement programs would be 20 times more effective in reducing fossil fuel use and greenhouse gas emissions than a similar cost for the corn ethanol program," Jaeger said. "Likewise, a gas tax increase would be 21 times more effective than promoting cellulosic ethanol."

Overall, it was estimated that U.S.-produced biofuels would cost between 20 and 31 times more than energy efficiency improvements that would reduce gas consumption by 1 percent. The study also reported that combining a gas tax increase with energy efficiency improvements could reduce U.S. fossil fuel use by more than 15 percent (or cut petroleum fuel use by more than 35 percent).

Next, the researchers looked at how much it would cost to achieve governmental targets for biofuel use and what the impact would be on fossil fuel use. In the U.S., the Renewable Fuel Standard calls for 15 billion gallons of conventional biofuel sources such as corn ethanol; 1 billion gallons of biomass-based diesel; 16 billion gallons of advanced cellulosic biofuels; and 4 billion gallons of other advanced biofuels to be used in transportation fuel by 2022. U.S. corn ethanol production has already reached 13 billion gallons, Jaeger said, but cellulosic ethanol, a so-called second-generation biofuel, is not yet commercially produced in the U.S.

The researchers concluded that all of these mandates combined would reduce fossil fuel use by less than 2.5 percent, or the same amount that a gas tax increase of 25 cents per gallon could achieve, but at an estimated cost of $67 billion compared with a cost of $6 billion with a gas tax.

To directly compare the cost-effectiveness of the biofuels with the two alternative approaches, part of the researchers' analysis evaluated the biofuels in combination with forest carbon sequestration practices so that they would produce the same mix of reductions in fossil fuel use and as a gas tax increase.

The study did not take into account the effect that increased production of biofuels might have on water use, pollution and food prices, all of which raise additional concerns about the merits of promoting biofuels, according to Jaeger.

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More information: The study is called Biofuel Economics in a Setting of Multiple Objectives and Unintended Consequences and was published in Renewable and Sustainable Energy Reviews. The study can be downloaded at hdl.handle.net/1957/25614

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dschlink
4 / 5 (1) Nov 29, 2011
In addition, proponents of biofuels continue to ignore a simple fact: the total harvestable biomass is less than the energy requirements of our current society. Project typical European per capita energy consumption to the entire planet, plan on continuing to eat, and the concept becomes laughable.
dogbert
1 / 5 (1) Nov 29, 2011
Excellent analysis.

Nothing will change, however. It has always been obvious that converting food into fuel made no sense and did not even significantly change CO2 levels.

It has never been about AGW. It has always been about transferring wealth.
Horus
1 / 5 (1) Nov 29, 2011
That's truly rich coming from OSU who was beat out on the $140 Million funding in BioFuel to market solutions by Washington State and the University of Washington who have gone on record recycling and showing the efficiency of recycling biomass for all current forms of petro consumption. Good timing OSU. I guess you feel butt hurt by PNL, the DoE and the USDA for being passed up on your biomass research?
SteveL
not rated yet Nov 29, 2011
That's truly rich coming from OSU who was beat out on the $140 Million funding in BioFuel to market solutions by Washington State and the University of Washington who have gone on record recycling and showing the efficiency of recycling biomass for all current forms of petro consumption. Good timing OSU. I guess you feel butt hurt by PNL, the DoE and the USDA for being passed up on your biomass research?
Interesting study from a very liberal state and university. Still they describe valid points concerning the lack of effect of such programs and the US government's lack of clear focus on these issues.

What I find incredibly sad are examples like how the US Department of the Interior spent dozens of million$ studying over 3,000 types of algae for biodiesel production by farmers and that data is just sitting at the Univeristy of Hawaii, meanwhile the US Department of Energy started all over again from scratch on similar research. The US government has more money than sense.
Shakescene21
3 / 5 (2) Nov 29, 2011
This study is half-baked. It purports to be an analysis of all biofuels, but it really only does an adequate job of studying biofuels from corn and soybeans. Everyone but the corn farmers agree that ethanol from corn is the dumbest idea in alternate energy. This study uses ethanol-from-corn as the principal baseline for evaluating biofuels, and of course biofuels look like a disaster.
The type of biofuels that will make a difference are those derived from crop waste and non-food biomass. The study gives the short shrift to these future sources of biofuels, probably because the technology and cost data are not yet known.
The bulk of this study is really an economic analysis of biofuels vs conservation with a gas tax. They conclude that a gasoline tax of 25 cents per gallon would save as much fossil fuel as the biomass program, at one tenth the cost.
jerryd
5 / 5 (1) Nov 29, 2011

If you include the other products from ethanol production and their value, corn oil and DDG's/dried mash which is a higher quality animal or human feed, stalks and cobs is almost enough to pay for the feedstock. So in reality ethanol only costs $1/gal to make.

Because it's 'waste' is an excellent food little extra acerage is needed nor is any extra used in the US because yields/acre have went up a lot.

You'll also fine fertilizer, other inputs have dropped and eff converting corn to ethanol has increased a lot.

Remember if one treats gasoline the same way they calculate ethanol, Gas would have only a 30% EROI as it takes 3 gals of crude to make a gal of gasoline. But that's how ethanol is calulated. And let's not forget the 3kwhrs and other energy, waste needed to make that gasoline.

And let's not forget all the jobs

Personally I drive EV's getting 250 and 600mpg equivalents so I laugh at you all slaving to support big oil/Ag giving them money week in, week out
Shakescene21
5 / 5 (1) Nov 29, 2011
"Interesting study from a very liberal state and university."

@SteveL -- If you read the text carefully, you'll see that the bottom line is that we should have a extra 25-cents-per-gallon gasoline tax, and scrap the biofuels program. Their liberal credentials are secure.
Eikka
2 / 5 (4) Nov 30, 2011

Personally I drive EV's getting 250 and 600mpg equivalents so I laugh at you all slaving to support big oil/Ag giving them money week in, week out


I laugh at you slaving to support China in buying their lithium and neodymium to make your car economically possible. Guess how they are produced?
dogbert
2.3 / 5 (3) Nov 30, 2011
Personally I drive EV's getting 250 and 600mpg equivalents so I laugh at you all slaving to support big oil/Ag giving them money week in, week out


Got to hand it to you. You run your vehicle mostly on coal and avoid gasoline taxes to boot.
Dug
1 / 5 (1) Nov 30, 2011
A good partial analysis. They missed the biggest limiting factor for biofuels - peak phosphorus and the direct competition that biofuels have with food crops for NPK. The fact that the human population hasn't lived within the renewable phosphorus cycle since the late 1800s when the population was less than 2 billion. We have no economically efficient process for replacing the fossil phosphate fertilizer sources that 95% of world food production is dependent upon. We (our children) are far more likely to starve to death in the next 50 years from phosphate limited food production than we are to die from climate change. http://www.energy...de/33164
antialias_physorg
not rated yet Nov 30, 2011
In addition, proponents of biofuels continue to ignore a simple fact: the total harvestable biomass is less than the energy requirements of our current society.

Why is there always this one-size-fits-all mentality?

Just because something doesn't solve ALL of a problem doesn't mean it should be discarded as 'laughable'.

But the bigger picture is more complex, Jaeger said, in part because biofuels are produced and transported using fossil fuels.

What a non-argument. If biofuels HAVE to be produced and transported usnig fossil fuels: yes. But they don't HAVE to be. Look to Brazil and see how it's done there. The problem is not the biofuels. It is just that the switchover to using them in all parts of the production chain isn't complete.

The argument about the release of carbon from newly tilled land is also ridiculous. You only release once - but can grow many (indefinite) cycles of fuels. Much better than releasing the equivalent of all those cycles from fossil fuels.
TheGhostofOtto1923
3 / 5 (2) Nov 30, 2011
Biofuels programs have been an initial field test of this infant technology. It has prompted research into genetically-engineered crops which are more easily converted and provide a much higher energy yield.

It does make some sense to use living material which can turn sunlight into useful energy as it can do this on it's own. It obviously needs a lot of work to make it viable however. In the meantime we learn so much more about bioengineering. This alone is worth the expense and may be the primary Reason it is being done.

Bioengineered organisms will be very importantly once humans begin living in permanent settlements off-planet; and it will be essential in stabilizing damaged ecosystems here on earth.
Eikka
1 / 5 (1) Nov 30, 2011

Just because something doesn't solve ALL of a problem doesn't mean it should be discarded as 'laughable'.


It's mostly a matter of logistics. For different types of fuel, we need different infrastructures, and parallel infrastructures are inefficient and expensive.

Biofuels can replace liquid fuels like diesel and gasoline. Suppose you can cover a quarter of the demand on biofuels. Great - but you still need something else that can cover the rest if we are ever to give up liquid fossil fuels.

So you might ask, why bother with the biofuels at all, and not just use the other fuel for everything?

Maybe it's a gaseous fuel, maybe it's electricity, maybe it's compressed air, but whatever it is, it will have to be scalable to a much greater degree than biofuels, and that means it's just pointless to maintain the biofuel infrastructure.
antialias_physorg
5 / 5 (2) Nov 30, 2011
For different types of fuel, we need different infrastructures, and parallel infrastructures are inefficient and expensive.

We have the infrastructure already. Gas stations sell a variety of fuels. One fuel more or less isn't going to make things all that more complicated.
Or just do it the way they do it over here: Mix the biofuel in with the regular fuel (currently up to 10% by volume). No extra infrastructure needed at all.

Biofuels can replace liquid fuels like diesel and gasoline. Suppose you can cover a quarter of the demand on biofuels.

Well, then we'd already be one quarter of a way to the goal. Buys us a lot of time to figure out how to do the rest. While not optimal the world can handle _some_ pollution. Solving the climate crisis does not mean we have to go back to absolutely zero use of fossil fuels.
Eikka
1 / 5 (1) Nov 30, 2011
The least desirable outcome is that we would have a handful of different options. Some cars working on biodiesel, some cars working on methane, some cars working on gassified woodchip, yet others on electricity etc. etc.

Because for all these small wedges in the pie, we would need a full manufacturing and distribution network multiplied by the number of different fuel options you have.

So the pumping station, instead of having tanks for regular and diesel, would need a pile of batteries, a shed of wood, a cylinder for gas, a tank for ethanol, another for biodiesel, a giant dewer flask for liquid hydrogen, a compressor for air...

And only a minority would use each option, thus dividing the number of people who have to pay for each version of the infrastructure into a fraction of the total. That is to say; it costs a whole lot of dosh.
Eikka
1 / 5 (1) Nov 30, 2011

Or just do it the way they do it over here: Mix the biofuel in with the regular fuel (currently up to 10% by volume). No extra infrastructure needed at all.


You forget that there ultimately won't be "regular" to mix with.


Well, then we'd already be one quarter of a way to the goal. Buys us a lot of time to figure out how to do the rest. While not optimal the world can handle _some_ pollution. Solving the climate crisis does not mean we have to go back to absolutely zero use of fossil fuels.


Wouldn't it be more intelligent to not waste money on it, and put it on solutions with more actual impact at a lower cost, like the article suggests?

These things are interconnected. It's pointless for example to make electric cars before you have clean electricity. It not only wastes your resources, but detracts from your other goals while accomplishing exactly nothing.
antialias_physorg
5 / 5 (1) Nov 30, 2011
You forget that there ultimately won't be "regular" to mix with.

So? If there's no regular left then you can dispense with _THAT_ infrastructure. You still have only one infrastructure.

like the article suggests?

The article suggests a tax increase - but that won't reduce fuel use. Will a tax increase reduce how often you have to go to work? That is a very limited instrument. And what do you do when it reaches its limit? Forbid people from using cars?

Forest carbon sequestration is also a spurious argument. You can only have so much forest at once. So you'll sequester a constant amount of carbon into this buffer system but keep pumping an ever increasing amount of fossil fuel exhausts into the atmosphere? Draw the graphs on paper (that's 2 lines). Any dummy can see that that won't do any good in the long run.
TheGhostofOtto1923
1 / 5 (1) Nov 30, 2011
Heres one infrastructure already under construction:

"UPS (NYSE: UPS) announced the purchase of 48 heavy tractor trucks equipped to run on Liquefied Natural Gas (LNG).

"The trucks will replace older generation diesel vehicles currently in use in the western U.S. The LNG trucks are expected to produce 25% fewer greenhouse gas emissions compared to the older trucks and use 95% less diesel fuel than the vehicles they replace."

"Worldwide, there were 12.7 million natural gas vehicles by 2010, led by Pakistan with 2.7 million, Iran (1.95 million), Argentina (1.9 million), Brazil (1.7 million), and India (1.1 million). The Asia-Pacific region leads the world with 6.8 million NGVs, followed by Latin America with 4.2 million vehicles. In the Latin American region almost 90% of NGVs have bi-fuel engines, allowing these vehicles to run on either gasoline or CNG.

As of 2009, the U.S. had a fleet of 114,270 compressed natural gas (CNG) vehicles, mostly buses..."
SteveL
not rated yet Dec 01, 2011
"Interesting study from a very liberal state and university."

@SteveL -- If you read the text carefully, you'll see that the bottom line is that we should have a extra 25-cents-per-gallon gasoline tax, and scrap the biofuels program. Their liberal credentials are secure.
Dropping the research and development of energy fuel programs and just slapping a tax on fuel is short sighted and wrong-headed thinking. While the thinking may be that the "rich" will pay more as they travel more and tend to have larger vehicles, their fuel usage won't really be effected. As usual just slapping a tax on fuel will simply hurt the poor more as fuel costs are factored into every product used. This was really a narrow perspective report from OSU and left a lot to be desired.
SteveL
not rated yet Dec 01, 2011
The article suggests a tax increase - but that won't reduce fuel use. Will a tax increase reduce how often you have to go to work? That is a very limited instrument. And what do you do when it reaches its limit? Forbid people from using cars?
Of course the next step whould be to increase the taxes even more, which again would not address the root cause and would be even harder on the poor as fuel/energy is an expense for every consumer product.
Callippo
not rated yet Dec 01, 2011
Dropping the research and development of energy fuel programs and just slapping a tax on fuel is short sighted and wrong-headed thinking
Of course, but biofuels cannot compete the cold fusion even from short term perspective. You should destroy million acres of tropical rain forests for being able to plant some weed there for few years. After then the soil nutrients will get depleted - what next? The million acres of desert is, what you'll get.
SteveL
5 / 5 (1) Dec 01, 2011
Heres one infrastructure already under construction:

"UPS (NYSE: UPS) announced the purchase of 48 heavy tractor trucks equipped to run on Liquefied Natural Gas (LNG).

"The trucks will replace older generation diesel vehicles currently in use in the western U.S. The LNG trucks are expected to produce 25% fewer greenhouse gas emissions compared to the older trucks and use 95% less diesel fuel than the vehicles they replace."
When Nitrous Oxide from burning LNG naturally reacts with the oxygen in the atmosphere it changes to Nitric Oxide which is a pollutant which has (according to some reports) 298 times the Greenhouse gas/global warming potential of CO2 and it damages stratospheric ozone. Just because it doesn't produce black sooty smoke LNG may not be the "clean alternative" its producers want us to believe it is.
antialias_physorg
not rated yet Dec 01, 2011
Of course, but biofuels cannot compete the cold fusion even from short term perspective.

You're right. Biofuels are so way ahead (they work) compared to cold fusion (which doesn't). There's really no competition here.
SteveL
not rated yet Dec 01, 2011
Of course, but biofuels cannot compete the cold fusion even from short term perspective.

You're right. Biofuels are so way ahead (they work) compared to cold fusion (which doesn't). There's really no competition here.
And I highly doubt cold fusion can be scaled down to run common portable engines like biofuels can.
Newbeak
not rated yet Dec 04, 2011
I think we have lots of room for improvement in the energy efficiency of vehicles.Did you read the sad news about the failure of the Aptera venture? Their vehicles would have been major conservers of fuel.Homes that are super-insulated also would save large amounts of fossil fuel.I particularly like the SIP construction method,which results in a building that uses a fraction of the energy used in frame construction,goes up quickly,is quiet inside, resistant to insect,rot,weather damage.
Of course,keep the research into alternate fuels going at the same time,especially research into biofuels from algae,which can be grown on desert land,and fed CO2 from conventional power plants.
SteveL
not rated yet Dec 04, 2011
If government wanted to spur economic growth via the home building industry, either tax or interest incentives for highly effecient building standards would be one way to do it.

especially research into biofuels from algae,which can be grown on desert land,and fed CO2 from conventional power plants.
Unfortunately there are not very many power plants in desert lands. The CO2 could be piped of course, but that's a lot of capital and would require governmental investment. Also, you'd have to get the environmentalists on board. They aren't usually fond of any building of anything anywhere for any reason.