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WILLIAM TUCKER: Bad Week for Biofuels

By William Tucker

In the speech I give to energy audiences around the country, I always refer to biofuels as “the stupidest idea in human history.”  Now granted, that might be challenged by recent entries such as erecting giant platforms in space to block out the sun or putting diapers on cows to control methane releases.  But generally I think it holds up. 

Never in my wildest dreams, however, did I expect to see biofuels called something worse.  I’m not going to repeat The Register’s headline, but you can see for yourself.  It was written in reaction to a report released last week by Britain’s Chatham House for the European Parliament.  Chatham House didn’t quite use the same language either, but their conclusions were much the same – biofuels are causing famines, raising gas prices and aggravating global warming – “worse than fossil fuels” was the phrase that emerged. 

Report?  What report?  I didn’t hear about any report.  No, you probably didn’t.  This of news never travels very fast.  If the story were that biofuels were our only hope for saving the planet, you can bet it would be on front pages everywhere.  Bloomberg did a story but Associated Press, New York Times, and Washington Post?  Forget about it.  Too much to explain. 

Now Chatham House is no small-time, partisan organization with funding from the oil companies.  This year it was ranked the #2 think tank in the world by the University of Pennsylvania’s  Global GoTo Think Tank Index, behind only the Brookings Institution.  It is the originator of the highly respected “Chatham House Rule,” which says that “participants [in an investigative effort] are free to use the information received, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed.” If nothing else, they are the gold standard for objectivity.  And after looking objectively at biofuels, they have decided that, quite simply, they are one of the worst ideas ever.

Here’s what the report had to say: 

  • Agricultural biofuel use increases the level and volatility of food prices with detrimental impacts on the food security of low-income food-importing countries.
  • Agricultural use also indirectly drives expansion of agriculture into areas of high carbon stuck such as rainforest or peatlands, resulting in indirect land-use change, the emissions from which may outweigh any greenhouse gas savings the biofuels are able to offer.
  • The 5 percent biofuel target [currently under consideration in the UK] is likely to cost UK motorists in the region of $700 million in the current financial year (2013/3014).
  • If the UK is to meet its EU obligation [which is higher], the annual cost of UK motorists is likely to rise to around $2 billion a year by 2020.

In other words, Chatham House has concluded what a lot of people have been saying all along – that this is a hare-brained scheme put together by people who didn’t know what they were talking about.  It will be long, long time, however, before the damage can be undone.

To understand this whole shtick, you have to realize that biofuels never had anything to do with global warming or preserving the environment.  That was all tacked on later.  The original motive came from the Energy Crisis of the 1970s. 

Biofuels were born out of Amory Lovins’ doll-house view of the world that we didn’t need the big bad oil companies or the big bad utilities – and especially big bad nuclear energy – but could all provide for ourselves out of our backyard.  “The reason electrical grids are designed to such exemplary – and expensive – standards of reliability,” wrote Lovins in one of his more mellifluous passages:

is that they must be, because so many people depend on them that a failure could be a social catastrophe.  If your solar system fails (which, of course, it should not do, as there should not be much to go wrong with it), you can put on a sweater or go next door.

Lovins’ vision was that we could all put a windmill over the garage and a solar collector on the roof and live happily ever after.  Pumping electricity from the local power plant to your house was wasteful and unnecessary.  Today his vision is that we should cover all of North and South Dakota with 50-story windmills and pump the electricity all the way to New York and California, but that’s irrelevant.  The important thing is that it still doesn’t include nuclear.

Buried among his ruminations, however, was a single paragraph in which Lovins – in the same we-don’t-need-the-bad-guys spirit – outlined how we could replace the oil companies by extracting fuel from crops: 

“[E]xciting developments in the conversion of agricultural, forestry, and urban wastes to methanol and other liquid and gaseous fuels now offer practical, economically interesting technologies sufficient to run an efficient U.S. transport sector . . .

The required scale of organic conversion can be estimated.  Each year the U.S. beer and wine industry, for example, microbiologically produces 5 percent as many gallons (not all alcohol, of course) as the U.S. oil industry produces gasoline.  Gasoline has 1.5 to 2 times the fuel value of alcohol per gallon.  Thus a conversion industry roughly ten to fourteen times the physical scale (in gallons of fluid output per year) of U.S. cellars and breweries, albeit using different processes, would produce roughly one-third of the present gasohol requirements of the United States . . .. The scale of effort required does not seem unreasonable . . ..    

There’s only one problem.  Notice that Lovins never bothered to estimate the amount of land needed for such an effort.  He only thought in terms of refining capacity.  Using Lovins’ own figures from beer and wine, it was easy enough to calculate.  It would take an area three times the size of the continental United States plus Alaska to produce one-third of the oil we consumed in 1977.  Yet Lovins found a copy of his Soft Energy Paths sitting on President Jimmy Carter’s desk when he visited the White House and so we were one our way. 

The ethanol mandate – adopted in 1980 and now under dispute in Congress – currently diverts nearly half our corn crop into gas tanks in order to replace about 3 percent of our oil.  What is amazing is to read the Chatham House report and discover that U.S. corn now supplies 65 percent of Britain’s ethanol as well.  Basically we have given up growing food in the Midwest and are becoming the world’s major supplier of ethanol.  Over in Europe, ambitious companies have started cutting down tropical rainforests to make room for palm oil plantations supplying Europe with “biodiesel.”  The result has been the destruction of habitat for dwindling species such as the orangutan.  Friends of the Earth, Lovins’ original home organization, calls this the “oil-for-ape scandal” – as if they weren’t responsible in the first place.

So what does all this have to do with global warming?  Well you have to realize, all that is a is a retrofit.  When the issue of carbon emissions came along, it was decided that, since all good things come in green packages, biofuels must be good for that, too.  The theory of “young carbon” and “old carbon” was devised and soon it was being asserted that since fuel crops simply took carbon dioxide out of the atmosphere and put it back again, burning them must be “carbon neutral.”  Nobody ever bothered to test any of this, but it certainly sounded good. 

According to Chatham House, however:

[C]rop-based biofuels are not carbon neutral: a large number of other sources of emissions must also be taken into account, for example, from chemical inputs and fertilizers, farm machinery, or refineries.  The largest potential source of emissions are those from land-use change such as deforestation or drainage of peatland that may occur to make room for biofuel crops. 

So what do we do now?  Environmentalists used to clap hands and dance in circles over the idea that American farmers – real farmers! – were to be enlisted to the environmental crusade by paying them to grow biofuels.  Lovins constantly chortles about the “profit motive” and how farmers and industrialists can be trained to do anything by giving them money.  (Real profits, of course, would tell you that biofuels are unproductive.  Mandates and subsidies are intended to override profits.)  So now try undoing what’s been done.

In the House of Representative, the effort to lift the ethanol mandate to 15 percent – where it starts destroying car engines – is running into opposition. There is even talk of a coalition of free-market Republicans and “consumer-oriented” Democrats challenging the whole apparatus on the grounds that ethanol is raising the price of gas.  But we haven’t yet heard from the Farm Belt.   Once the issue reaches the Senate, it will go the way of gun control.

Is there a lesson in all this?  You could talk about amateurism and letting a country be run by people who don’t know what they’re doing.  But the simplest takeaway might be this:  All good things do not come in green packages.