Final Notes from BIO’s World Congress

On June 29 at BIO’s World Congress, Steen Riisgaard, CEO of Novozymes, and Stephen Tanda, Board Member of Royal DSM N.V., released a report from the World Economic Forum on The Future of Industrial Biorefineries. The report says that a biorefinery value chain could create revenue for agricultural inputs ($15 billion US), for biomass production ($89 billion), for biomass trading ($30 billion), for biorefining inputs ($10 billion), for biorefining fuels ($80 billion), for bioplastics ($6 billion) and for biomass power and heat ($65 billion) by 2020.

You can download and listen to the press conference Release of report on The Future of Industrial Biorefineries.

The highlight of the final day of the World Congress was a debate between Princeton Visiting Scholar Tim Searchinger and MSU Professor Bruce Dale, moderated by Univ. of Minnesota’s John Sheehan. Sheehan sought to explore both the strongest and weakest parts of the arguments for and against including an indirect land use penalty in the carbon lifecycle of biofuels and bioenergy. For him, the central question in the debate is whether or not the world is running out of land to use — for all purposes, not just agriculture — meaning that any new use, such as biofuels, inevitably causes a shift of use somewhere else.

For Searchinger, the central point is that the traditional lifecycle of biofuels and biomass energy accounts a credit for using carbon stored in crops and trees. Bioenergy, he argues, should only get credit for new sources of carbon that it creates or for using carbon that would have decayed and entered the atmosphere anyway, but never for carbon that is already stored.

Dale took an optimistic view that a switch to bioenergy — and away from petroleum — would spur the creation of additional carbon stores. This could be accomplished through increased productivity and yield on the same amount of land, for instance, and through regrowing of crops and biomass sources so that the credit given to bioenergy is repaid quickly.

Wrong Question: Can Biofuels Be Carbon Friendly?

The Science Insider blog last week hosted an interesting debate between Tim Searchinger, Princeton visiting scholar, and John Sheehan, of the Institute on the Environment at the University of Minnesota, regarding the recent policy proposal in the pages of Science by Searchinger et al. to “fix” the carbon accounting of biomass for bioenergy and biofuels in U.S. legislation and the successor to the Kyoto protocol, by giving credit only to biomass that can be managed in such a way as to sequester additional atmospheric carbon in the soil. As Searchinger puts it in the recent debate, “bioenergy only reduces greenhouse gases if it results from additional plant growth or in some other way uses carbon that would not otherwise be stored.”

To be sure, use of bioenergy can only reduce the overall level of greenhouse gases in the atmosphere by sequestering carbon in the soil (in root systems). And yes, individual biofuel or bioenergy producers could use only new biomass that has recently pulled carbon from the atmosphere (although other environmentalists may differ on that) or biomass that would otherwise be left to decay and emit the stored carbon anyway. The question then is whether there is enough of this type of biomass to meet energy needs.

But that is not the point of the current Kyoto protocol or of U.S. cap-and-trade legislation. Their shared goal is to reduce overall GHG emissions, over time, ideally lowering the cap until emissions reach equilibrium.

Searchinger cites recent modeling studies to say that not employing his fix to global carbon accounting “would lead to the loss of most of the world’s natural forest because clearing those forests for bioenergy becomes one of the cost-effective means of complying with laws to reduce greenhouse gas emissions.” However, the fossil fuel industries are certain to receive allowances under the U.S. legislation. Employing a carbon accounting model that treats biomass as equivalent to fossil fuel would definitely make continued reliance on fossil fuel the cost-effective alternative.

Another interesting response to the Searchinger et al article comes from Geoff Styles of the Energy Collective, who extends the carbon accounting argument to electric vehicles. All alternative energy sources can be opened up to particular scrutiny. What is needed is a truly accurate and balanced accounting of fossil fuel use to compare these arguments.

The only other political option would be to drastically cut use of all energy. Models do project that the current worldwide economic recession has brought about a reduction in climate emissions by cutting energy use.

Searchinger does note that biomass and biofuels have the potential to balance greenhouse gas emissions – depending on land management. A better question here is whether his models can show that fossil fuel use also has the potential to balance greenhouse gas emissions with proper land management.

Weekly Industrial and Environmental Bio Blog Roundup

This week we start off with a little Road Music, From Bluegrass to Switchgrass, from our colleagues at the Biofuels Center of North Carolina. They’ve put together a nice set of bluegrass pieces. To listen visit their web site.

Gas2.0 announces this week that BP could start selling biofuels in 2010, writing that,

“BP has partnered with Verenium to bring a commercial-scale cellulosic ethanol facility online next year to start bringing alternative fuels to a gas”

Wednesday, according to the Government Monitor,Tom Vilsack announced,

“the publication of nine additional BioPreferred product categories which will now be eligible for Federal procurement preference.”

Making, “more Than 1,000 Biobased Products Eligible For Federal Procurement,” the Monitor reports.

You can find USDA biopreferred on Twitter, http://twitter.com/BioPreferred and on the Web at: www.biopreferred.gov.

So what’s the deal with this conversation on whether or not biofuels are carbon friendly? We at BIO have certainly have had a lot to say on the matter and you can find all our opinions on our biofuels page.

However, our opinions aside, the folks at the journal Science, where the initial study and follow-up policy paper were published say that they are giving us the inside story, by holding a moderated conversation between Tim Searchinger and John Sheehan—kind of interesting, take a look for yourself.

That’s all for this week. See you next week!

Compounded Climate Accounting Errors

Timothy Searchinger, visiting scholar at Princeton University, Dan Kammen of the University of California Berkeley, David Tilman of the University of Minnesota and other authors from the Environmental Defense Fund published an interesting new proposal in the Policy Forum section of Science magazine today. The argument put forward is that “Replacing fossil fuels with bioenergy does not by itself reduce carbon emissions, because the CO2 released by tailpipes and smokestacks is roughly the same per unit of energy regardless of the source.”

The premise behind this proposal is that the world is facing such a great need to reduce carbon emissions that future sources of energy and biofuels cannot make use of any currently sequestered carbon. Maybe… but there’s a perverse consequence of using this logic. Fossil fuels are a source of sequestered carbon. If you then say that all existing biomass is an untouchable source of sequestered carbon, you are essentially counting that sequestration as a benefit of having used fossil fuels for the past 150 years.

The logic is particularly tortured when a foregone sequestration penalty is attributed to biofuels when none is counted for petroleum.

There is much in the paper to agree with — particularly in recognizing carbon sequestration benefits from improved land management practices and energy crops. And certainly, the challenge of climate change is so great that implementing best practices for carbon sequestration is a necessity.

But a proposal that attributes carbon sequestration in trees as a plus in the accounting of fossil fuel use is counterproductive.

Environmentalists Want to “Stick” It to Farmers

Jason Hill of the University of Minnesota’s Institute on the Environment wrote recently in the St. Paul Pioneer Press, asking why the Waxman-Markey climate change bill should treat agricultural emissions differently from energy and transportation emissions, with a “carrot-and-stick approach, one in which fossil fuels suffer the stick while agriculture feasts upon the carrot.” Hill’s primary objection to the bill is the amendments added by Rep. Collin Peterson (D-Minn.), which exempt agriculture and forestry from carbon caps but provide credits for carbon sequestration that farmers can trade on the market. They also would postpone implementation of the EPA’s analysis of international land use change.

Writes Hill, “Peterson’s amendment is essentially nothing more than a slick accounting trick, one meant to portray biofuels produced in this nation in a better light while making the carbon footprint of agriculture in developing countries look worse.”

This is a bizarre statement, turning even the theory of indirect land use change on its ear. The original calculation of indirect land use change put forward by Searchinger et al held that “when farmers use today’s good cropland to produce food, they help to avert greenhouse gasses from land use change.” Further, in the context of international negotiations for a climate change treaty to replace the Kyoto Protocol, the ILUC theory is clearly an attempt to shift accounting of carbon emissions in developing countries onto U.S. biofuels.

Calculations of land use change by current models are completely contradicted by agricultural trade and production numbers, making the models appear to be nothing more than accounting tricks. The model projections look nothing like real outcomes because they rely on several false premises and double count certain sources of emissions. The greatest fallacy of the ILUC theory is that worldwide agricultural productivity has already reached a natural limit and cannot respond to increased demand in any other way than clearing of rainforests. The main premise of the theory – that biofuels have been introduced into a static worldwide agricultural system and therefore are the primary cause of shifting agricultural production – is an assumption that can’t be supported by data.

Using USDA’s modest assumption for growth in yields of U.S. corn over the life of the Renewable Fuel Standard, a simple calculation shows that corn productivity can keep up with demand to produce the conventional biofuel portion of the RFS. This assumes continuation of 2016 to 2018 USDA projections for 2022 – constant total planted acreage of 90.5 million acres, increase of 75 million bushels per year for fuel ethanol, and increase of 1.8 bushel per acre per year yield improvement:

Overall harvested acreage for corn production is projected to remain stable due to continued yield productivity gains

In fact, USDA currently projects a corn yield of 159.5 bushels per acre for this year. And USDA projections from January 2009 show that inclusion of biofuels will stabilize land use, in terms of the acres planted to the eight major crops:

U.S. land planted to eight major crops.

Beyond this, and despite a report) that deforestation in Brazil increased in June, the deforestation rate in Brazil continues to decline. Responding to the Agence France-Presse report, Mongabay noted, “Deforestation in the Brazilian Amazon typically peaks during the June-August dry season when ranchers and farmers burn forest to clear land for development.”

A group of scholars – that includes Hill – recently called for a focus on real solutions to climate change. The world needs economic growth, energy and food. We should not premise our search for solutions on the false notion that these three necessities are in direct competition with each other.

New Biofuels Manifesto

University of Minnesota Professor David Tilman, Princeton University Visiting Scholar Tim Searchinger, Dartmouth Professor Lee Lynd and others involved in the debate over the environmental and social impacts of biofuels have published in Science magazine what amounts to a new manifesto on how biofuels can be done right.

The authors list five biofuel feedstocks that are the best in terms of sustainability — “lower life-cycle greenhouse-gas emissions than traditional fossil fuels and with little or no competition with food products.”

The authors conclude:

Three steps should be taken: meaningful science-based environmental safeguards should be adopted, a robust biofuels industry should be enabled, and those who have invested in first-generation biofuels should have a viable path forward.

The EPA’s proposed rule on the Renewable Fuel Standard was intended to outline a viable path forward for first-generation biofuels. The Best Case Natural Gas Dry Mill, the Biomass Dry Mill, and the Biomass Dry Mill with Combined Heat and Power scenarios outlined in the “EPA Lifecycle Analysis of Greenhouse Gas Emissions from Renewable Fuels” all produce reductions in greenhouse gases that come close to or exceed the 20 percent standard in the RFS. The EPA’s definition of the Best Case is: “Best case plants produce wet distillers grain co-product and include the following technologies: combined heat and power (CHP), fractionation, membrane separation and raw starch hydrolysis.”

The question will be whether anyone invests in these technologies or in additional biofuel production at all, given the current economic and social climate in which biofuel companies are operating. One possible factor in choosing the best biofuels ought to be how soon they can become a reality and whether they can be improved from there.

The Case for Correct Logic

Michael Grunwald of Time Magazine recently published a new, rather self-serving article in the Washington Monthly, filled with distorted logic and mangled facts.

His portrayal of Tim Searchinger as a humble lawyer who experienced an epiphany about biofuels is disingenuous at best. While now a visiting scholar at Princeton University, Tim Searchinger was formerly a lobbyist for the Environmental Defense Action Fund and was intimately involved in lobbying key Members of Congress during the drafting of the Energy Independence and Security Act of 2007. Sen. John Thune (R-S.D.) today characterized the inclusion of indirect land use as “an eleventh-hour, backroom change to the energy bill.”

One of Grunwald’s more egregious claims is that biofuels have “ratcheted up deforestation rates through a chain reaction that Searchinger and I witnessed on a visit to the Amazon.” How precisely does one “witness” a claimed indirect effect, occurring on a global scale, through a visit to the Amazon? This claim is as unsupported as that made by the EPA in its Notice of Proposed Rule:

there is considerable overall certainty as to the existence of the land use changes in general, the fact that GHG emissions will result, and the cause and effect linkage of these emissions impacts to the increased use of feedstock for production of renewable fuels.”

The EPA certainly hasn’t footnoted this assertion. And the paragraph that follows it maintains that the EPA is confident of the cause and effect connection due to the modeling (See Federal Register, Vol. 74, No. 99, Tuesday, May 26, 2009, Proposed Rules, p.25024). But the causal connection is one of the assumptions of the model; it would create circular logic then to claim that the model was proof of the causal connection.

According to Grunwald, Searchinger’s previous epiphany was that “in a world with 6.7 billion mouths to feed, when you use an acre of farmland to grow fuel, somewhere an acre of something else is probably going to be converted into new farmland to grow food.” And Searchinger’s latest epiphany is that as world population increases to 9 billion, “we’re going to need the world’s farmland to produce as much sustenance as possible on as little ground as possible, so that we can leave the Amazon alone.” Therefore, he concludes, we need to consolidate agricultural production and oppose biofuels.

The problem with that logic is that the Amazon and other rainforests exist in places where population is growing fastest. If agricultural production is consolidated in the United States or in Brazil, how would those growing populations afford to buy it? This particular “epiphany” courtesy of Karl Marx has stood the test of time pretty well. I guess we can be thankful he was an economist and not a lobbyist.

Oversimplification of the relationship between biofuel production and deforestation ill-serves efforts to protect the rainforest. Grunwald’s argument that “we’re better off burning gasoline on a warming planet than using land as a substitute” would be true if and only if stopping biofuel production could directly prevent deforestation. There are too many direct causes of deforestation — including land clearing for subsistence farming to feed growing populations who have no other way of feeding themselves — standing in the way.

Best Available Science?

Yesterday, the Scientific Committee on Problems of the Environment (SCOPE) released a report, “Biofuels: Environmental Consequences and Interactions with Changing Land Use,” based on the proceedings of its International Biofuels Project Rapid Assessment.

The Environmental Working Group immediately praised the report, claiming that it “confirms that corn-based ethanol is a dead end.” (I recommend reading this response to EWG by Biofuels Digest’s Jim Lane.)

Far from that confirmation, the report’s recommendations recognize that whether the maximum environmental benefit of biofuels is achieved depends on how they’re produced, and that “many of the adverse effects of biofuels on the environment could be reduced by using best agricultural practices.” In fact there are 17 papers included in the report, drawing a range of conclusions about the benefits or dangers of biofuels.

Still, the executive summary cites a number of premises regarding biofuels that environmental groups now consider articles of faith:

The rapidly growing production of biofuels requires additional cropland. In some cases, this additional land comes from agricultural land previously used to grow food or feed crops. In a hungry world, these diverted crops must be made up elsewhere, thus driving land conversion– perhaps in different countries and on different continents – to compensate for the loss of food-crop production.”

I’ve heard these premises asserted as fact too many times now, yet no one has yet publicly demonstrated direct evidence of them. Within academic papers, it has become customary to footnote the paper by Searchinger et al in Science last February, but even that paper cited the same assumptions.

It is certainly a reasonable hypothesis to test whether crop production throughout the world has expanded into ecologically sensitive carbon sinks as a result of the U.S.’ inability to meet its share of increased worldwide demand for food and feed. It is also reasonable to test the alternative hypothesis that increases in crop productivity are able to meet the incremental increases in biofuel production under the RFS. Either way, it would likely be most effective to work for an international accord to directly protect ecologically sensitive carbon sinks, but that would take more work.

It should also be noted that production of agricultural commodities was shifting to other countries prior to the 2005 and 2007 laws. In point of fact, Argentina, Australia, Brazil, Canada, Costa Rica, the European Communities, Guatemala, India, Nicaragua, Mexico, Thailand and Uruguay have all joined a WTO dispute against the United States aimed at expanding in most cases their own agricultural production.

Iowa State University’s Center for Agricultural and Rural Development noted in response to that WTO case:

Farmers base their decisions about what and how much to plant on numerous factors, including rotation considerations, production costs, expected market prices, availability of crop insurance, and expected benefits from farm programs. The complicated nature of these decisions makes it quite difficult to determine if U.S. farm programs for crops other than cotton are vulnerable to a WTO case against them on the basis of price suppression. The role that these programs play in farmers’ planting decisions varies across crops, regions, and crop years. Simple “rules of thumb” that use total payment levels as a guide or the belief that the programs work as a cheap food policy are inadequate measures of the impacts of farm payments on U.S. supply and international commodity prices.”

Those conclusions are applicable to the current debate on indirect land use change.

But now the assumptions cited by environmentalists are set to be enshrined within California’s Low Carbon Fuel Standard, despite the fact that California admits the available evidence contradicts the premises.

Nathanael Greene of the Natural Resources Defense Council considers the California law and the EPA’s expected rule on the RFS, which utilizes similar modeling, to be the best available approach:

In order to develop a full lifecycle accounting protocol that includes emissions from indirect land-use change, both regulators are relying on economic models. They use these models to look at the world first without the biofuels and then with them; the change in pollution is assigned to the biofuels. While the models are complex, both agencies have relied on the best peer-reviewed science and economics and will update their rules regularly over time.”

Jim Lane of Biofuels Digest has provided a very cogent and much needed analysis of the methodology being used to “measure” the indirect land use change carbon emissions attributed to biofuels:

In short, we’re arguing about whether the models make for a good forecast. A problem is that we haven’t backcast — that is, checked the predictions of the model against known outcomes in the past to see if the predictions were accurate.”

Another problematic aspect of the use of general equilibrium models in lifecycle analysis is that they require the assumptions that the environmentalists cite as articles of faith. The models are therefore incapable of testing the assumptions as hypotheses. General equilibrium models, by definition, must assume a point of equilibrium and then assume a shock to the system. They are properly used to assess the risks of a new policy or program that is expected to have an economic impact on markets. But the calculated outcome of the modeling, the new predicted equilibrium, is not an actual measurement.

So these models do not look at the world without biofuels and the world with biofuels to compare them. In fact, they make calculations that come directly from their starting assumptions. To mistake the calculations for conclusions is circular logic. It is not the best available science – it isn’t science at all.

I Say Sustainable, You Say…

The Guardian newspaper reported last week that environmental activist and reporter George Monbiot had successfully petitioned Britain’s Advertising Standards Authority (ASA) to ban an ad containing the tagline, “Biofuels — A Lower-Priced, Sustainable Answer to OPEC’s Oil.” The ad was sponsored by the Renewable Fuels Association, the Canadian Renewable Fuels Association, the European Bioethanol Fuel Association, and the Brazilian Sugarcane Industry Association.

Though Monbiot’s petition is not publicly available, the ASA’s adjudication response indicates it is similar to his previously expressed opinion that “there is no such thing as a sustainable biofuel.”

Monbiot, of course, bases this conclusion in part on the paper published by Searchinger et al. in SciencExpress last February. Monbiot, like many others, believes that this paper proves that biofuels production causes shifts in land use that increase greenhouse gas emissions. In point of fact the paper starts from an assumption that shifts in land use are caused by biofuels production. It therefore cannot be taken as proof. The paper states its assumptions clearly enough:

Although these estimates face several uncertainties, the general finding flows from three reliable projections. First, farmers will replace most of the grain diverted from food and feed by ethanol because the demand for overall food and feed — as opposed to any particular grain — is inelastic. Second, increases in cropland will provide most replacement grain because they are cost-effective and fast, the yield effects of biofuel demands are both positive and negative, and the world has many convertible acres – up to 170 million hectares in Brazil alone and perhaps 2.8 billion hectares worldwide. Most significantly, the potential emissions per hectare of land conversion greatly exceed the annual greenhouse reductions per hectare of biofuels.

The ASA banned the ad’s use of the word “sustainable” in part on a misinterpretation of the conclusions of “The Gallagher Review of the indirect effects of biofuels production.” The ASA’s adjudication incorrectly states that “the review considered biofuel production would result in net greenhouse emissions and loss of biodiversity through habitat destruction in the period to 2020.”

In fact, the Gallagher review states, “the balance of evidence shows a significant risk that current policies will lead to net greenhouse gas emissions and loss of biodiversity through habitat destruction.” The review includes the Searchinger paper in the balance of evidence, but clearly recognizes that it can not be considered proof that biofuels cause indirect land use emissions. The review’s conclusions include a clear statement that “Mechanisms do not yet exist to accurately measure, or to avoid, the effects of indirect land-use change from biofuels.”

Senators Weigh In on EPA Rules

On Monday Nov. 17, six U.S. Senators sent a new letter to EPA Administrator Stephen Johnson echoing a proposal that BIO previously made. BIO earlier called on EPA to release its proposed methodology for measuring greenhouse gas emissions during the rule’s comment period, but withholding conclusions on specific levels of reductions achieved by particular biofuels until the methodology was complete. The Senators’ letter states:

The methodology ultimately used by EPA in crafting this program will have a significant impact on the overall success of the program, and the science and methodology employed by EPA should be subject to thorough public and academic review. Likewise, the premature publication of specific greenhouse gas (ghg) emissions calculations based on incomplete ILU [indirect land use] assumptions could undermine the ultimate success of RFS-2 and be detrimental to U.S. biofuels producers and farmers, as it will undermine investor confidence and further deprive the industry of the investment capital it will need to meet the renewable targets established in RFS-2.”

The Senators go on to say,

EPA’s inclusion of international ILU changes as a factor in determining significant indirect emissions has the potential to effectively disqualify significant volumes of U.S. renewable fuels production from being used to meet the Advanced Biofuels Schedule in RFS-2, thus placing in jeopardy the entire fuels program.”

BIO has consistently said that models for measuring indirect land use change are immature, and recent revisions of crop price forecasts by the USDA and the Food and Agricultural Policy Research Institute provide a case in point. FAPRI’s model is usually used to predict crop prices and yields around the world to guide U.S. farmers in decisions about planting, storing and marketing their grains. Their model is now a key to the theory developed by Tim Searchinger and the EPA’s proposed methodology for the RFS.
In a recent edition of its “Decisive Marketing,” FAPRI revised the advice it gave farmers at the beginning of this year, saying:

Since peaking in early July, the corn and soybean markets have been in a downtrend. Those downtrends have become very steep since late September, pushing prices much lower than nearly everyone expected. The USDA’s 2008-09 price forecasts were lowered eighty cents per bushel for corn and soybean prices cut two dollars in the October supply/demand reports. These are huge cuts to be made in just one month, but current prices are now much lower than the lowest end of the USDA’s forecast price ranges.”

Later in the newsletter, FAPRI buries a very significant inference from the price drop, “Current prices discourage increased plantings in South America.” [emphasis mine]

Note that while the USDA’s Feed Outlook projected prices for corn in 2008/09 were lowered by $0.80 just between October and November, to $4.00-$4.80 per bushel, this is significantly down from July, when the USDA’s Feed Outlook projected prices of $5.50-$6.50.

Environmental groups, such as the NRDC, would like to claim that they have science on their side. See for instance the New York Times editorial this week. The drastic revision of projections from these models within a six-month period demonstrates how far the science has to go. At this point, it would be dangerous to include the models in a regulatory system.