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Bush’s Dangerous Energy Proposal

Moving too quickly on alternative fuels could backfire, says one expert on ethanol fuels.
January 25, 2007

In President Bush’s State of the Union address this week, he announced several key energy proposals, most notably increasing the use of biofuels such as ethanol. But some critics are skeptical of the president’s proposal to rely largely on ethanol to reduce gasoline consumption by 20 percent in a decade. Indeed, this could do more harm than good, says David Victor, director of Stanford University’s Program on Energy and Sustainable Development. This week Victor is participating in the World Economic Forum in Davos, Switzerland, where climate change leads the agenda. Technology Review caught up with him by phone to get his views on the president’s speech–and on what the United States should be doing.

David Victor, head of Stanford University’s Program on Energy and Sustainable Development, says the president’s energy proposals may be leading the nation in the wrong direction.

Technology Review: At least superficially, President Bush’s remarks on energy echo some of your own ideas. What parts of his speech did you applaud?

David Victor: The overall strategy, which is to rely on markets and encourage diversity in energy and to encourage efficiency, all of which he said in one way or another, is absolutely right. What was new last night was the goal of doubling the size of the strategic petroleum reserve. That’s an extremely important thing to do.

His emphasis on technology is absolutely crucial. What he did say about climate change did emphasize technology. All of that is sound.

I thought the rest of the stuff was drifting off into the zone of unreality. The target that he sets of cutting down gasoline consumption by 20 percent in a decade is, I think, almost certainly unachievable.

TR: One of the technologies the president emphasized is converting wood chips and grasses, known as cellulosic feedstocks, into ethanol. Could that make his goals achievable?

DV: You have to be careful because a very large part of our biofuels policy is not about energy at all. It’s really about the heartland and farm politics because the current corn-based biofuels don’t really save us that much energy. Cellulosic biomass [which is potentially much more efficient] is still really some distance off in the future. If we try to meet these aggressive targets very quickly, what we’re going to end up with is a much, much larger version of the current, already inefficient, corn-based ethanol program.

TR: Documents released by the White House said that the vast majority of the 20 percent reduction in gasoline use in the next decade should come from using more biofuels such as ethanol. Is this a good strategy?

DV: In my view, this is a dangerous goal because the other technologies [such as cellulosic ethanol] are not available, [and] it really demands that we dramatically scale up our corn-based ethanol program. And I think that has serious ecological problems because of the large amount of land that they’re going to have to put under cultivation. [There are] big economic problems because [making ethanol from corn] certainly isn’t competitive with other ways of making biofuels, such as from sugar.

The other part of the problem is that it now appears that the price of sugar and the price of corn is tied to the oil market. Planters are looking at oil prices and making decision about how much to plant and about how much of their crop they’re going to send into ethanol production and how much into food. So if oil prices stay high, then you’re going to see the prices of these important food products rising at the same time. And there’s already warnings from ranchers, who use corn for feed. And food processors are raising the price of their products and warning their shareholders because the prices of corn syrup and other corn-based feedstocks [are] rising.

TR: The president mentioned improving fuel economy. How important is that?

DV: Some sort of a ratcheting up of fuel-economy standards is long overdue. And a lot of people have been calling for it. And maybe they have enough votes for it on the Hill, and enough support from the White House that something will actually get done about it.

TR: As he did last year, the president mentioned plug-in vehicles, which are powered by both gasoline and electricity from the grid. Does it make sense to develop this technology?

DV: That’s really interesting technology. It’s interesting because it’s less demanding of battery technology than the all-electric vehicle. The problem with all-electric vehicles is that they need very good batteries that can store a lot of energy, don’t cost an arm and a leg, and don’t weigh a ton. And that goal has been elusive so far. But the pluggable hybrids are interesting because they store enough energy for the first typically 20 or 30 miles of driving, and then the engine kicks in like a normal hybrid vehicle. And since most of the energy gets used in short trips, that can result in a large reduction in gasoline consumption. And in most cases it doesn’t require such complicated electrical recharging stations because you’re not trying to charge up such a large battery over such a short period of time–you’re trying to put less energy in, and so that makes it easier to see how these vehicles will be diffused into use, because people wouldn’t have to go rewire their house in order to buy one of these vehicles.

So the technology from the pluggable-hybrid side is very interesting. And if you start doing that, there are really potentially important synergies between that and the electric power grid. (See “How Plug-in Hybrids Will Save the Grid.”)

TR: What would be your ideal energy plan?

DV: I think we have to recognize that we will be dependent on foreign oil for the foreseeable future. And that our goals, if we set realistic goals, should be to make the markets more flexible and robust by building in shock absorbers like the bigger strategic petroleum reserve.

There’s a big difference between what you can do in the short term, which is about making the markets work better, putting everything on the same economic footing, and what you can do in the long term, which is, potentially, radical transformation of the technologies to pluggable hybrids, cellulosic biomass for biofuels, to maybe fuel cells with hydrogen if that turns out well. But that requires a very long-term perspective, with investments in a whole range of technologies so that you can see eventually what technologies actually make commercial sense. And then they, over a period of decades, will come into wider use. But in between now and then, we will be dependent on foreign oil, and this discussion of energy independence is actively harmful.

TR: Last year’s State of the Union address contained a similar emphasis on reducing gasoline consumption: the president said that the United States was “addicted to oil.” Yet those proposals weren’t made into law. Will things be different this year?

DV: It’s easy to lay out a long list of things that can be done. It’s easy to set ambitious targets–usually targets that can’t be met. And then in reality not much gets done. Part of that is because it’s politically very difficult to put together the coalition to get things done, and because some of these things cost money. What usually survives are things that have a very wide coalition, and that’s why I suspect that some sort of larger biofuels program is going to survive, because almost everybody’s in favor of that. Most of the other things will probably get delayed or ignored. It will be interesting to see whether there will be a sufficient coalition to ramp up fuel-economy standards.

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