INSIGHT: California rule on ethanol needs careful look

28 April 2009 17:18  [Source: ICIS news]

Corn in high demand for ethanol(Recast for clarity)

By William Lemos

HOUSTON (ICIS news)--California’s announcement last week that corn-based ethanol provided no environmental benefits compared with gasoline dealt a blow to the biofuel, but critics should not rush to the conclusion that the ruling spells doom for the US ethanol programme.

In fact, it does not, and the case for using biofuels may be stronger now than it was a week ago before the Golden State announced its highly anticipated Low Carbon Fuel Standard (LCFS).

What a lot of ethanol critics missed is that, although California raised questions about the carbon intensity of corn-based ethanol, it legitimised the use of biofuels by including versions of them in the LCFS.

California said it would need to have some 25 new facilities built in the state to produce more than 1.5bn gal/year of biofuels required to meet its new carbon emissions standards.

The use of low-carbon biofuels in the state will more than quadruple by 2020, the California Air Resource Board (CARB) said during the presentation of the LCFS.

In other words, the message trend-setting California sent the world last week was that biofuels make sense for the environment, as long as they do not rely on corn as its primary feedstock.

But even that claim remains open for discussion, and the US ethanol industry has heatedly disputed California’s conclusion on corn ethanol, charging the CARB ruling is based on faulty science.

"We are disappointed with the board's vote," said retired general Wesley Clark, co-chairman of Growth Energy, a lobbying group that represents the US ethanol industry.

"This was a poor decision, based on shaky science, not only for California, but for the nation,” Clark said.

Growth Energy claims California unfairly singled out the indirect effects of corn ethanol, while ignoring the significant indirect effects of all other fuels, including petroleum.

“….the decision puts another road block in moving away from dependence on fossil fuels and stifles development of the emerging cellulosic industry," the group said in response to the ruling.

Growth Energy was not alone in its defence of corn ethanol.

California missed the mark on corn ethanol because it relied on outdated data, said Kenneth Cassman, a professor at the University of Nebraska’s Agronomy and Horticulture department.

According to Cassman, CARB researchers failed to include estimates of energy efficiencies in new ethanol biorefineries that initiated production on or after January 2005.

These recently built facilities now represent more than half of total US ethanol production and will account for 75% of the industry’s output by the end of 2009, he said.

With the newer plants included, direct greenhouse gas (GHG) emissions from corn ethanol are estimated to be equivalent to a 48-59% reduction compared with gasoline, a study by the University of Nebraska showed.

Cassman said he did not believe California was ideologically bent against corn ethanol, but he said the state provided a disservice for alternative fuels as whole by failing to include up-to-date data in its research.

California’s LCFS will eventually have to be modified. It is not scientifically defensible in the long term,” he said.

Regulators in California also failed to take into account that older ethanol facilities, on which CARB was said to have based its research, are now required to meet stricter environmental criteria, said an ethanol producer in the US midwest.

“We are not a grandfathered industry,” the producer said, adding that some ethanol producers are investing a lot of money to make older facilities more energy efficient.

The debate on the feasibility of corn ethanol will rage on, but the verdict has only minor relevance at this point.

The reason is rather simple. The US has an ambitious plan to displace gasoline consumption and it cannot do so without corn-based ethanol.

While second-generation ethanol is already being produced (the kind California is hyped about), large-scale output of cellulosic material is unlikely to become a reality for several years to come.

In the meantime, the US will have no choice but to rely on corn ethanol if it wants to reduce gasoline consumption and curb crude oil imports.

The alternative to this is continued dependence on fossil fuels, something the US can no longer afford.

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By: William Lemos
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