As the Iowa caucuses near, Democratic and Republican presidential candidates are advocating energy plans that would mandate the use of more biofuel. While support for ethanol may be politically expedient in a state that produces about a third of the ethanol in the United States–more than any other state–many experts warn that mandates for ethanol could lead to higher fuel and food prices without doing much to reduce greenhouse-gas emissions and improve energy security.
Although leading candidates from both parties support ethanol, only the Democratic contenders have produced detailed energy plans. These plans, which are surprisingly similar, call for requiring the production of 60 billion gallons of biofuels or more by 2030. (Current production of ethanol is expected to reach 6.4 billion gallons in 2007.) For example, Barack Obama is calling for a requirement of 36 billion gallons of renewable fuels by 2022, and 60 billion gallons by 2030. Hillary Clinton’s plan is nearly identical. John Edwards has proposed a more ambitious goal of 65 billion gallons of ethanol by 2025.
While these mandates would be much bigger than the current federal requirements of 7.5 billion gallons of biofuels by 2012, they are in line with more recent proposals by Congress and the current administration. A bill before Congress would require 36 billion gallons by 2022. President Bush has proposed a mandate of 35 billion gallons of renewable and alternative fuels by 2017.
Reaching these goals will require using new sources for ethanol in addition to the corn used today. Corn-based ethanol does little to reduce greenhouse-gas emissions, says John Reilly, the associate director for research at MIT’s Joint Program on the Science and Policy of Global Change. It takes a lot of energy to both grow corn and convert it into biofuels. As a result, corn ethanol only saves about 15 to 20 percent of the carbon emitted from burning gasoline, Reilly says.
Beyond corn-derived ethanol, each of the candidates’ plans calls for a transition to cellulosic sources such as perennial grasses and wood chips. For example, Barack Obama would use federal money to promote the production of ethanol from noncorn sources, with the goal of producing 2 billion gallons from these sources by 2013. That will take far more research and development funding. Making ethanol from cellulosic sources requires more steps, therefore costs more than making it from corn. As a result, there are still no commercial facilities able to make cellulosic biofuels.
Requiring the use of 60 billion gallons of ethanol could also lead to increased fuel prices by limiting consumers’ options. Crop yields and prices can vary widely from year to year, depending on the weather and other factors. Taking away the flexibility to turn to other fuels could drive up fuel prices, says David Victor, director of the Program on Energy and Sustainable Development at Stanford University.
But high fuel prices are not the only reason to turn to biofuels. If reducing greenhouse gases is the priority, then cellulosic ethanol is attractive. It requires much less fossil fuel to produce, and it can save about 90 percent of the carbon released by burning gasoline, Reilly says.
While mandates might not be a good approach, they are likely to be the approach that the next president advocates. Indeed, biofuel mandates are already a key part of energy legislation now before Congress. If mandates are imposed, Otto Doering, an agricultural economist at Purdue University, says that it’s essential that they come with a detailed “bridge policy” for moving from corn to cellulosic sources. While the candidates have offered some steps in this direction, he recommends a “Manhattan project”-like effort, with $1.5 billion a year to fund intense development of cheaper ways of making cellulosic ethanol.