LONDON: 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.
That followed a crippling drought which raised corn feedstock prices.
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 shale deposits.
US 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 fertilizer 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 program was expanded under the US 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 industrialized 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.
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 civilization. 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 US 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 biofuels.
First, US 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 tons 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.
— Gerard Wynn is a Reuters market analyst. The views expressed are his own.
