Reconciling Sustainability, Resource Conflict and Biofuels: EPA Holds the Key
Posted August 8, 2013
The RFS has driven substantial investment in advanced and cellulosic biofuels that would not have happened without national policy. These technologies are important because they provide new economic activity and low carbon alternatives to petroleum. Yet there are also important economic and environmental reasons to proceed carefully. Congress understood the complexity of this undertaking when it designed the Renewable Fuels Standard (RFS). The policy empowers the Environmental Protection Agency (EPA) to adjust the mandate levels to address unanticipated developments. Recently, the EPA signaled that it would exercise that authority in response to stakeholder concerns. EPA’s decision shows that it is able and willing to resolve challenges without congressional interference.
While the RFS has encouraged biofuel investment, it has also come under intense scrutiny. In practical terms, ethanol can only be blended into gasoline at levels of up to 10%. Many view the approaching “blend wall” as a major source of instability within the RFS. At the outset, Congress realized that launching a renewable fuels industry was a complex task fraught with uncertainties. It therefore empowered EPA to adjust the annual requirements when warranted. EPA has stated that it will do so for the 2014 compliance year, when the blend wall is reached.
By using the power that Congress gave it, EPA shows that it is capable of addressing unforeseen events. This is preferable to congressional interference which could have disastrous consequences. As we’ve stated before, biofuels done wrong could inflict considerable harm on wildlife, climate and land. Critical safeguards built into the RFS are intended to prevent wild places from becoming unchecked mining operations. That may not seem like a huge risk at test volumes. But as the RFS scales up to a massive 36 billion gallons per year, parameters and boundaries become extremely important. Congressional tampering could result in the loss of these safeguards.
But even with the safeguards in place, environmental, food security, and livestock groups are increasingly concerned about feedstock sourcing. Creating tens of billions of gallons of biofuel will require resources- lots of them. This risks resource conflict. For instance, nearly 40% of the nation’s corn crop is used for fuel. While a portion of the byproduct is returned as animal feed, the net diversion of corn to fuel is undeniably large. But these risks are not isolated to food based feedstock. Any feedstock that is used excessively risks environmental degradation and resource conflict with other industries, all of which undermine policy stability and the investment climate by extension.
As EPA exercises administrative flexibility, it should do so in a way that also ameliorates these other problems to the greatest extent possible. That means taking pressure off of feedstocks that harm the environment, compete with food or tighten feedstock supplies beyond sustainable levels. Over the long term, this type of ongoing calibration will be fundamental to a stable and sustainable industry.