(The author is a Reuters market analyst. The views expressed
are his own.)
By Gerard Wynn
LONDON, March 1 A stalled biofuel industry will
need to produce far more efficient fuels to avoid setting off
another bout of arguments over its contribution to boosting
energy security and cutting carbon emissions.
Biofuels had a difficult 2012.
In the United States, Energy Information Administration data
show production through November fell compared with the same
period the previous year, putting the industry on track for the
first annual drop since 1996. (See Chart 1)
That followed a crippling drought which raised corn
In the European Union, the executive European Commission
proposed effectively to freeze crop-based biofuel consumption at
around present levels, halving a previous 2020 target.
Biofuel demand critically hinges on government targets.
In setting targets, policymakers have so far weighed the
possible benefit of biofuels towards carbon emissions cuts and
energy security against an impact on food prices.
Regarding emissions cuts, it is now clear, depending on
where the boundary is set in life-cycle estimates of carbon
emissions, that some biofuels offer limited or no benefits
compared with conventional gasoline.
Regarding energy security, one issue which is not formally
accounted for by policy is energy return. If biofuels yield
little more than the energy used to make them then they will
ultimately fail to replace conventional fossil fuels, especially
given growing indigenous U.S. production of oil and gas from
Chart 1: goo.gl/Mq6AL
Chart 2: (page 16) goo.gl/F64Ng
U.S. Air Force (USAF) analyst Captain T.A. Kiefer examined
biofuels through their contribution to energy security in a
paper published on Friday in the USAF Research Institute's
Strategic Studies Quarterly.
Kiefer presents a strong opinion, as indicated by the
headline of his expanded, full report, "Twenty-First Century
Snake Oil: Why the United States Should Reject Biofuels as Part
of a Rational National Security Energy Strategy", published as a
discussion paper at the Canada-based Waterloo Institute for
Complexity and Innovation.
The paper is a deeply researched and referenced discussion
of the net energy of biofuels.
Energy return on investment (EROI) is one measure of the
total energy available in a fuel as a proportion of the energy
used to produce it.
A value of one, or unity, implies a hand-to-mouth existence.
Diesel and gasoline have an EROI of 10 times or more,
according to Kiefer, reflecting low crude oil extraction and
refining costs, while corn ethanol is around 1.3, according to
the U.S. Department of Energy.
Corn ethanol is a poor performer partly because of the
energy intensity of corn cultivation, where farmers use
fertiliser manufactured from natural gas to boost yields.
The EROI concept should be handled with care, to compare
like with like.
The Department of Defense's Deputy Director for Technology
Strategy Adam Rosenberg issued a formal rebuttal of Kiefer's
article in the same USAF journal.
Rosenberg pointed out that coal-fired power was also very
inefficient, but the point perhaps is that coal is cheap to
extract compared with its energy content, unlike a fuel which
consumed lots of natural gas in its manufacture and was then
burned in place of coal.
The present U.S. biofuels programme was expanded under the
U.S. Energy Independence and Security Act of 2007 through a
renewable fuel standard which mandates blend volumes of biofuel.
The standard is formally introduced in the act as "Energy
Security Through Increased Production of Biofuels", nailing its
purpose to boost energy security by supplying an indigenous
alternative to imported crude oil.
From an energy security perspective, it might be argued that
a corn ethanol EROI close to 1 is enough, provided the high
energy input is domestic natural gas, since that would still see
ethanol displace imported crude.
Such a country would inflict self harm, however, by draining
its indigenous natural gas rather than produce less energy
intensive gasoline from imported crude.
It is an obvious but important idea that a country must get
significantly more energy from its fuel compared with the effort
in making it, if it wishes to run all the energy-hungry
processes of an industrialised society.
Kiefer cited studies that an EROI below 6 is consistent with
recession, in other words a minimum threshold for a modern,
energy-intensive quality of life. (See Chart 2)
The bare minimum is 3, according to a 2009 study published
in the journal "Energies" by researchers at the State University
of New York, called "What is the minimum EROI that a sustainable
society must have?"
"Of course the 3:1 minimum 'extended EROI' that we calculate
here is only a bare minimum for civilisation. It would allow
only for energy to run transportation or related systems, but
would leave little discretionary surplus for all the things we
value about civilization: art, medicine, education and so on,"
the authors said.
EU and U.S. policymakers see second generation biofuels made
from waste and woody cellulose, rather than intensively
cultivated food crops, as the future of the biofuel industry,
while Brazilian sugarcane is also less energy-intensive.
However, there are at least three problems with cellulosic
First, U.S. production levels shows that it is still
uneconomic. The Environmental Protection Agency downgraded last
year's blending requirement to just 10.45 million
ethanol-equivalent gallons, nearly 490 million gallons short of
the 500 million mandated volume.
Second, these biofuels may have the same problems regarding
greenhouse gas emissions as regular biofuels, if the boundary in
life-cycle carbon emissions includes land use change.
Third, given the lack of actual production, there are no
data yet to reliably estimate its energy return.
Biofuels seemed to make sense when the United States
introduced its renewable fuel standard in 2007, and when the EU
approved its biofuel target the following year.
So far the European Commission has proposed effectively to
halt industry growth pending better understanding of its wider
impacts. It has proposed limiting the contribution of crop-based
biofuels to 5 percent in 2020.
In the latest data available from the European Environment
Agency, crop-based biofuels already accounted for 4.3 percent of
transport energy consumption in 2010, at 14 million tonnes of
oil equivalent (mtoe) compared with a sector total of 322 mtoe.
Meanwhile, the United States is already nearing a plateau in
its mandate for first generation biofuels (including corn,
excluding sugar cane ethanol), at 15 billion gallons annually
every year from 2015, compared with 13.9 billion in 2011.
A halt in expansion of the global industry makes sense while
policymakers assess performance, where energy return should be a
part of the discussion.
(Editing by James Jukwey)