Efforts to replace oil with biofuels in the United States are at a critical juncture. Double-digit growth in the production of corn-based ethanol has contributed to a sharp increase in grain and soybean prices while failing to deliver the environmental gains that had been hoped for. It's time to reduce the incentives for food-based biofuels and accelerate the transition to more sustainable alternatives - the so-called "next-generation" cellulosic technologies, which are expected to become viable in the coming years.
Efforts to replace oil with biofuels in the United States are at a critical juncture. Double-digit growth in the production of corn-based ethanol has contributed to a sharp increase in grain and soybean prices while failing to deliver the environmental gains that had been hoped for.
It's time to reduce the incentives for food-based biofuels and accelerate the transition to more sustainable alternatives - the so-called "next-generation" cellulosic technologies, which are expected to become viable in the coming years.
In some ways, U.S. biofuels policy has been a stunning success. Production of fuel ethanol soared to nearly 7 billion gallons in 2007 - double the level in 2003. This has pushed the United States ahead of Brazil, which pioneered the fuel ethanol industry in the 1980s. The price of corn has meanwhile nearly tripled to over $6 per bushel, fostering an economic renaissance in the U.S. grain belt and creating thousands of new jobs.
But this is just the beginning. The Renewable Fuels Standard (RFS), signed into law in December 2007, requires that biofuels production be raised to 36 billion gallons in 2022. And while it is laudable that 21 billion gallons of that requirement are set aside for advanced biofuels not based on food crops, this would still imply a doubling in current production of corn-based ethanol, which would require fully half of today's annual corn crop.
Increasing biofuels production so dramatically presents an array of environmental risks, including increased nitrogen runoff and the loss of biodiversity as lands are cleared for biofuel crops. And recent studies indicate that corn-based ethanol could actually produce more carbon dioxide emissions than gasoline-due to the oil and coal needed to produce corn and convert it to ethanol and to the fact that as U.S. cropland is planted in biofuel crops, pressures will grow to convert forests and grasslands elsewhere, releasing large amounts of carbon dioxide.
These concerns demand a more measured approach to the production and use of biofuels. They also point to the need to accelerate the transition to second-generation biofuels. These fuels - derived not from food crops but from the fibrous, or cellulosic, material of plants - can be produced from a wide array of agriculture and forestry wastes as well as from fast-growing trees and grasses. The feedstocks can be grown on untilled land and cultivated in ways that improve water quality and wildlife habitat. Under the right conditions, these crops may also be able to draw carbon out of the air and sequester it in the soil.
It is time to reform the large federal subsidies to biofuels. With the price of oil now over $120 a barrel, the generous tax subsidy is no longer needed - it is mainly benefiting the oil companies that receive the subsidy in return for blending ethanol with gasoline. Congress should phase out the tax subsidy for corn-based ethanol and retain it only for advanced biofuels that reduce emissions of carbon dioxide to less than half the emissions from gasoline.
It is also time to relax the renewable fuel standard, slowing the pace of growth of the industry while technologies are developed that will allow biofuels to be produced from agricultural and forestry wastes-eliminating the competition with food and reducing the greenhouse impact of those fuels. And the share that must come from cellulosic biofuels should be increased.
Achieving these changes will not be easy. Biofuels have become the "golden child" of U.S. energy politics, highly popular with conservative and progressive politicians alike. But if biofuel policies are not reformed soon, the growing impact on food prices and the environment will spur a reaction that may prove the industry's undoing.
That would be a shame. The United States desperately needs to diversify its fuel supplies and reduce its dependence on oil. Advanced biofuels technologies could one day be an important part of a low-carbon energy economy, but only if they are developed in a deliberate and responsible way.
Christopher Flavin is president of the Worldwatch Institute, an environmental research organization based in Washington, D.C.