USDA's Vilsack talks about the future but wants to waste $6b on the past
Posted October 21, 2010 in Moving Beyond Oil, Solving Global Warming
Today, Secretary of Agriculture Tom Vilsack gave a speech outlining the administration’s policies on biofuels, focused on reducing our dependence on foreign oil and supporting rural economies. Unfortunately, while he embraced a vision for transitioning from corn ethanol towards the newer, cleaner, advanced biofuels we need, when it came to concrete policy he signaled administration support for an extension of wasteful corn ethanol subsidies and praised EPA’s flawed decision to allow even more corn ethanol to be blended into our fuel supply.
Vilsack reaffirmed the goal laid out in the Renewable Fuels Standard to produce 21 billion gallons of advanced biofuels by 2022 and acknowledged that the biofuels that we produce today—roughly 12 billion gallons of ethanol, primarily from corn—are not advanced:
Today, we produce around 12 billion gallons of ethanol biofuels and around 800 million gallons of biodisel. Very little of which is considered an advanced biofuel.
He also focused on a new USDA Economic Research Service report titled Effects of Increased Biofuels in the US Economy in 2022, which highlights the positive economic impacts of increased productivity and technological progress in the domestic biofuels industry.
However, Secretary Vilsack failed to make a critical distinction between policies that promote more biofuels and those that promote better biofuels. Instead, he indicated administration support for an extension of the largest government incentive program for biofuels—the Volumetric Ethanol Excise Tax Credit or “VEETC”—which has cost taxpayers $20 billion over the last four years and gone primarily towards subsidizing the mature corn ethanol industry, and ironically the oil industry. Besides competing with our food supply and raising the price of food and feed in our stores, the EPA found that when all direct and indirect impacts are factored in, corn ethanol creates more global warming polluting than the gasoline it is meant to replace. While Vilsack acknowledged that reform is needed and only called for a “short-term” extension, even a one-year extension of the VEETC at current levels would cost taxpayers nearly $6 billion and deliver little to no additional domestic corn ethanol production above and beyond what is already mandated by the RFS. But besides being redundant and wasteful at a time when every dollar counts, it comes at the expense of developing new and cleaner advanced biofuels, such as perennial grasses grown on marginal or once degraded lands, winter cover crops grown on exposed cropland, and sustainably managed forests that provide a wide range of critical ecosystem services.
Vilsack praised EPA’s decision last week to raise the limit on the amount of corn ethanol that can be blended with our gasoline, from 10% currently to 15% for vehicles made after 2007 as helping to boost demand for biofuels. This is despite opposition by a broad coalition of environmental groups, public health advocates, livestock ranchers and automakers, who have long called on the administration to follow the science and conduct more thorough testing of the impacts of higher ethanol blends on air pollution before approving gasoline with higher ethanol blends—commonly referred to as E15. These groups have pointed to serious environmental and public health concerns around the tailpipe emissions of vehicles that run on gasoline blended with ethanol, which damages the pollution controls in older engines causing more toxic air pollution to be released from cars.
He also announced plans to issue final rules to implement the Biomass Crop Assistance Program (BCAP), aimed at expanding the range of biomass feedstocks for biofuels and assisting farmers to grow more sustainable, perennial “energy crops”. To date, however, the BCAP program has raised serious concerns, which we discussed here earlier this year. Though it was supposed to support the development of new feedstocks for advanced biofuels, if the program’s pilot phase is any indication, it looks like it will spend the vast majority of its funding to pay for the collection of wood for biomass energy, rather than helping develop truly sustainable biomass sources. Thus, it will neither helping lay the groundwork for a transition to advanced biofuels, nor source biomass in a way that encourages sustainability.
Our policies need to create markets and guide regulations that actually incentivize us to choose sustainable biofuels. Critical to this are performance-based policies that encourage the development of broadly sustainable agronomic systems for biomass production. Without appropriate safeguards in place to ensure that we are choosing sustainable biomass feedstocks and harvesting them in ways that protect our lands, programs like BCAP could do more harm than good if they lead to the degradation of forests. Unfortunately, USDA has not conducted the necessary environmental assessment, nor established the necessary safeguards, to ensure that this does not occur. Secretary Vilsack indicated that the final rule includes provisions intended to address these concerns and we certainly hope this is the case. NRDC will track those provisions when the rule is published so look out for future posts for follow-up.
The Gulf Coast oil disaster has made clear that we must urgently transition toward low-carbon fuels if we are to break our dangerous dependence on oil, minimize the risk of further oil spills, and decrease global warming pollution. Advanced biofuels can be part of the solution to these challenges, but let’s be clear. Not all biofuels are created equal, and corn-based ethanol is one that does more harm than good.
The EPA’s decision last week to raise the limits on how much corn ethanol can be blended in our gasoline and the ongoing taxpayer subsidies for corn ethanol are a mistake. We know that corn ethanol is not a clean fuel, and therefore, the administration should not be promoting it. Instead of helping to accelerate the shift towards better-performing, truly low-carbon advanced biofuels, these policies waste precious resources that should be devoted to establishing a genuinely sustainable biofuels industry.
See here for NRDC’s press release in reaction to Secretary Vilsack’s speech.
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Comments
Bioblogger — Oct 22 2010 10:09 AM
I disagree with your assessment that corn ethanol does more harm than good. I represent advanced cellulosic biofuel developers and I can tell you that your organization's confusing pro and con messages on ANY biofuels compromises the adoption of ALL of them. Corn ethanol is NOT a food vs. fuel issue. For every ton of corn used in production 600 lbs. of high protein livestock feed is produce (leaner cows with less, ahem, methane). Indirect land use theory has been found to be highly speculative - while clearly a barrier to investment and deployment of all biorefineries. Until the NRDC realizes that confusing the public discourse on biofuels further entrenches the fossil fuel paradigm, expect further delays in alternative fuel RD&D. Investors worry that NRDC will continue to pull the rug out from under every forecast they attempt to make. Please join the biofuels movement and realize that there is no Gen. 3 and 4 without steadily improving 1 and 2 infrastructure.
American citizen — Oct 22 2010 04:51 PM
The NRDC continues to whine about the 6 billion dollar tax credit. This goes to the blender who in turn passes it on to the consumer in lower priced gas. So if the tax credit goes away, as usual, it will be the consumer who takes it in the shorts to the tune of paying 4.5 cents more per gallon for your gas.
Be careful what you ask for, you just might get it..... and when you get it be sure and thank the NRDC!
Brian — Oct 22 2010 05:08 PM
Re: American Citizen
So the government collects taxes from everyone and dumps into a big pile. They then write a check back to consumers who buy gasoline, meaning that ALL TAXPAYERS (including people who rarely drive) are subsidizing gasoline usage. How is that a good idea?
Enrico Palazzo — Oct 22 2010 05:13 PM
@ Bioblogger. Three comments: (1) there is indeed a good deal of uncertainty inherent in ILUC modeling, just as there is in other with any economy-wide equilibrium analysis. However, I don't think that this is sufficient reason to ignore the threat; (2) thank you for pointing out the use of co-products. But these are already incorporated in most of the present ecological impact modeling that NRDC and others rely on; (3) We have heard this claim many times that 1st generation infrastructure will lead to 3rd and 4th generation, but it is not clear whether there is any good evidence that this is the case. Do you have any?
@American citizen: would $27/year (4.5 cents x 600 gallons) be an egregious price to pay to protect our soil and water resources or, perhaps, the rainforests? Before that, however, I wonder where your number is from. It's really not clear exactly how the benefit is split between the producers and consumers. But since gasoline prices are relatively inelastic, you can expect that the consumer probably won't save too much.
Bioblogger — Oct 22 2010 05:26 PM
The Oak Ridge National Laboratory has submitted results of their investigation for the California Air Resources Board (CARB) of the indirect land use change theory stating that the impact is "minimal to zero" over the last decade. "The study, which examined use of grain and demand for ethanol over a 10-year period, found that increased demand by ethanol was largely met by reallocating domestic uses of grain – and not by reducing grain for export, which is the basis for the ILUC theory." They recommend that CARB update their carbon accounting formula. I suggest the NRDC stop using the argument in its prejudice against corn ethanol.