Study: U.S. Biofuels Policy A Fail

The U.S. government has thrown billions of dollars in support behind the biofuels industry, in the form of mandates and loan guarantees (and, again, here), in the hopes of weaning the country off foreign oil and cutting greenhouse gas emissions. But a recent study by economists at Oregon State University says that the use of biofuels, as mandated in the EPA’s Renewable Fuel Standard, would barely put a dent in fossil fuel consumption, and would likely increase greenhouse gas emissions. Further, the study [PDF] finds that imposing a gas tax and implementing energy efficiency improvements would be a far more cost-effective means of meeting these goals than continuing the current biofuel subsidy programs.

Conventional wisdom – fed by industry lobbying – has held that biofuels are a “carbon-neutral” fuel because the carbon dioxide that’s emitted during combustion is equivalent to what the crops absorb from the atmosphere while they are growing. But according to Bill Jaeger, a professor in the agricultural and resource economics department at Oregon State and lead author of the study, biofuels lose their carbon neutrality when fossil fuels are used to transport biofuels and when farmers use nitrogen fertilizers (made using natural gas) to grow biofuel feedstocks. Additionally, using valuable farmland for growing biofuel feedstocks can push food production onto previously uncleared land, which releases carbon accumulated in soil and vegetation.

image via Cosan

The study, “Biofuel Economics in a Setting of Multiple Objectives & Unintended Consequences,” published in Renewable and Sustainable Energy Reviews, focused on corn ethanol, soybean biodiesel, cellulosic ethanol from switchgrass grown in the U.S., canola biodiesel produced in Europe and sugarcane ethanol produced in Brazil.

The findings indicate that reducing gas consumption by 1 percent by transitioning to U.S.-produced biofuels would cost between 20 and 31 times more than achieving the same result with energy efficiency measures. The study also reported that combining a gas tax increase with energy efficiency improvements could reduce U.S. fossil fuel use by more than 15 percent.


  • Reply December 5, 2011


    The assumptioon that “biofuels lose their carbon neutralityu00a0when fossil fuels are used to transport biofuels and when farmers use nitrogen fertilizers (made using natural gas) to grow biofuel feedstocks”., misses the point. If biofuels are not transported, then a like amount of fossil fuels would be, using the exact same amount. u00a0And, the crops will be grown, no matter how they are used. u00a0These things happen anyway. u00a0It is just a question of how we use them. u00a0My question: u00a0Who sponsored and paid for this study?

    • Reply December 13, 2011

      Pete Danko

      wlee52 — Did you read the paper? Unfortunately, at the time you wrote your note we did not have a link to it in our story. Sorry about that. I have now added that link to the story ( your points: The study does take into account the fossil fuel inputs for all forms of energy that it examines, including fossil fuels, and compares the net differences (which is highly variable, I might add, depending on the type of biofuel). So Jaeger has that covered quite well.nnMore importantly, and with respect, I must take issue with your very simplistic assertions regarding what is in fact a highly complex web of effects and counter-effects.nnYou state it takes “the exact same amount” of fuel to transport fossil fuels as it does biofuels. Really? The transportation needs and infrastructures for different fuels are highly variable. I would be shocked if the costs were equal. It would be almost magical.nnYou assume that all the crops will be grown, no matter how they are used, and that the rise of a huge new demand component has had no impact at all on the amount of crops grown, nor on where they’re grown, nor on the GHG produced in these processes. There is a concept called “indirect land use change” that I would highly recommend you Google.nnAs tidy and easy your analysis is, it bears no relationship to the very complex interaction that takes place in a real world of multiple variables. I recommend you read the paper and see how Jaeger attempts to bring into his analysis as many of these variables as possible in order to get some true sense of how we can best reach what seems to be his goal: reducing greenhouse gas emissions most efficiently. I myself have not studied the paper closely enough to make a judgment as to its ultimate merits, but there is no doubt in my mind that we need more of this kind of sophisticated, scientific analysis in order to get us past simplistic and often wishful thinking.nAs for who sponsored and paid for this study, I’m going to ask Jaeger that, but I’m guessing it wasn’t the incredibly powerful corn ethanol lobby, nor (since Jaeger’s analysis points toward a gas tax) the oil companies!Pete

    • Reply December 13, 2011

      Pete Danko

      Professor Jaeger tells me the research was done as part of his responsibilities as an extension policy specialists at OSU. Thus, Oregon taxpayers, not any external organization or industry, supported it.

  • Reply December 13, 2011


    The study,u00a0u201dBiofuel Economics in a Setting of Multiple Objectives & Unintended Consequences,u201d published inu00a0Renewable and Sustainable Energy Reviews, focusedn on corn ethanol, soybean biodiesel, cellulosic ethanol from switchgrassn grown in the U.S., canola biodiesel produced in Europe and sugarcane nethanol produced in Brazil.nnThis is the flaw in this argument as all these crops (with the exception of canola and soybean oils) are geared toward ethanol production. Properly used ethanol is OK but mandating it’s mixing with gasoline has been less than effective and is causing a lot of damage to engines that were not set up properly to burn that fuel. nnSoy and canola (rapeseed) produce so little oil per acre per annum as to be a not too humorous joke. Algal oil offers a reasonable alternative to fossil fuels as the production rates in closed systems (which can be located on “scrub” land which would allow for farm land to be Farm {food producing} Land.) is considerable and the oil compatible with our present oil infrastructure.nnEd

Leave a Reply