1. Are Biofuels the Answer? By: Catherine Clark Econ 539 Presentation 2

2. Main Research Questions:  Will biofuels allow the U.S. to be energy independent?  Are they more environmentally friendly than the fossil fuels they will replace?  What are the unintended consequences of promoting biofuels on a national level?

3. What is a biofuel?  A biofuel is any biomass (feedstock) that can be turned into liquid fuel.  Ex. Corn has cellulosic material that is separated and processed to make ethanol.  Ex. Soybeans are broken down into alcohol which is then converted to biodiesel.

4. What is the Current U.S. Policy?  14 Provisions in the EPAct 2005 involve subsidies for biofuels.  The act encourages the USDA, DOE, & EPA to partner to create a biofuel that will be commercially available and priced competitively with petroleum fossil fuel.  Other policy goals include moving to a fuel source that is less polluting than fossil fuel.

5. Review of the Literature:  Hill et al. (2006) determined using life cycle analysis that corn ethanol is more polluting than just fossil fuels when mixed at high quantities for CO, VOC, PM10, SOx, NOx.  They also determined that soybean biodiesel is less polluting than diesel for VOC, CO, PM10, and SOx.  If we use all of the corn and soybeans grown to make fuel we could cover 2.4% and 2.9% U.S. ethanol and biofuel demand.

6. Efficiency of Some Feedstocks Net Energy Produced (%) Net Energy Produced (%) Fossil Fuel 80 Corn85 Soybean94.4 Virgin Timber 86 Newspaper73

7. What about using marginal lands?  Walsh et al. (2003) determined at a farmgate price of $1.83 per Giga Joule of energy, farmers with Conservation Reserve Program lands would benefit from growing biofuel crops instead of traditional crops.  Schneider and McCarl (2003) furthered this study to determine biofuels were the best way to mitigate excess carbon emissions if carbon sold for $70/ton.

8. Other Options  Jaeger et al. concludes that a gas tax or raising CAFE standards is a cheaper way to mitigate green house gas emissions than producing biofuels.

9. Concerns With the Literature:  It does not take into account excess pesticide or fertilizer use in growing crops.  It does not take into account how food supply will be affected when farmers are encouraged to sell traditional food commodities at higher prices to produce biofuels instead.

10. Conclusion:  Can biofuels make the U.S. energy independent? No. The best we can hope for is less dependence of foreign oil.  Are biofuels better for the environment than fossil fuels? We are not sure, but this is certainly not the cheapest way to reduce green house gas emissions.  Who is benefiting from the (politically attractive) billions of dollars currently subsidizing biofuels? You be the judge of that.

11. If you would like to learn more:  Aden, Andy, Rovert Wooley, and Mark Yancey. (2000). Oregon Biomass-to-Ethanol Project: Pre-feasibility Study and Modeling Results. NREL: National Renewable Energy Laboratory Publication.  Hill, Jason, Erik Nelson, David Tilman, Stephen Polasky, and Douglas Tiffany. (2006). Environmental, Economic, and Energetic Costs and Benefits of Biodiesel and Ethanol Biofuels. Proceedings of the National Academy of Sciences, 103(30), 11206-11210.  Jaeger, William K., Robin Cross, and Thorsten M. Egelkraut. Biofuel Potential in Oregon: Background and Evaluation of Options. Forthcoming to Oregon State University Press.  Kemppainen, Amber J. and David R. Shonnard. (2005). Comparative Life-Cycle Assessments for Biomass-to-Ethanol Production from Different Regional Feedstocks. Biotechnology Progress, 21(4), 1075-1084.  Kim, Seungdo and Bruce E. Dale. (2005). Life Cycle Assessment of Various Cropping Systems Utilized for Producing Biofuels: Bioethanol and Biodiesel. Biomass and Bioenergy, 29, 426-439.  Schneider, Uwe A., and Bruce A. McCarl. (2003). Economic Potential of Biomass Based Fuels for Greenhouse Gas Emission Mitigation. Environmental and Resource Economics, 24, 291-312.  Walsh, Marie E., Daniel G. De La Torre Ugarte, Hosein Shapouri, and Stephen P. Slinsky. (2003). Bioenergy Crop Production in the United States. Environmental and Resource Economics, 24, 313-333.