INSIGHT: US hybrid, biofuel policies do more harm than good

03 March 2011 17:41  [Source: ICIS news]

By Joe Kamalick

Electric cars can be red but theyWASHINGTON (ICIS)--US policies and incentives meant to drive consumers to electric, hybrid and biofuel automobiles may do more harm than good to the environment and could be impeding development of green energy alternatives, a new analysis argues.

Amy Kaleita, an environmental studies policy fellow at the Pacific Research Institute (PRI), says in a new study of alternative vehicle fuels and related government incentives: “Unfortunately, many policies designed to ‘green’ the American car culture may well wind up doing the exact opposite”.

In her analysis, titled “Car-tastrophe”, Kaleita argues that plug-in hybrid electric vehicles and electric-only cars present a misleading environmental profile.

When they are “in electric mode, the cars themselves have no emissions of greenhouse gases or air pollutants, but generating the electricity that charges the battery usually does”, she said.

That’s because almost half of US electric power is coal-fired, and another 21% of the nation’s juice is generated by natural gas.  While gas has about 45% less carbon content than coal, Kaleita notes that it is not a low-carbon electricity source.

It can be argued that the nation should abandon coal and even natural gas as power-generating fuels in favour of more environmentally friendly and renewable sources such as wind and solar power.

But she notes too that wind and solar “are not likely to comprise significant and reliable sources in the near term, and at this time are not economically competitive without significant price supports in the form of federal, state and local incentives and subsidies”.

As long as coal and natural gas continue to fuel nearly 70% of US electric power, Kaleita said, electric vehicles just don’t make environmental sense.

She cited research showing that, compared to a baseline situation where there are no plug-in hybrid vehicles (PHEVs), the deployment of “PHEVs led to increased grid emissions of greenhouse gases, non-methane total organic compounds, and carbon monoxide”.

Citing their short operating range and weather-related limits on their use along with the often unfavourable environmental consequences, Kaleita argues that “Clearly, plug-in cars are only ‘green’ for a limited number of situations, considering both regional electricity mix and driving habits.”

“Nevertheless, this has not prevented policymakers from rushing headlong into incentivising widespread adoption of eclectic vehicles,” she said.

In his state of the union speech in January and in other venues and statements, President Barack Obama has urged policies, legislation and regulatory actions to ensure that there are 1m plug-in hybrids on US roads by 2015.

In addition, Kaleita points out, existing federal law provides as much as $2,350 (€1,715) in tax credits for consumers who buy electric cars, and up to $2bn in research and development (R&D) funding to accelerate motor vehicle electrification.

Neither do biofuels offer a clear environmental or energy advantage compared with gasoline-powered internal combustion engines (ICEs), she said.

“Researchers have concluded that if conventional vehicles were fuelled by E-85 (85% ethanol blend, with the ethanol produced from cellulosic feedstocks), conventional vehicles would have substantially lower net GHG [greenhouse gas] emissions than PHEVs under the current electricity generation portfolio,” the study said.

“However, on the whole, there is substantial debate among scientists regarding the net GHG impact of biofuel production,” Kaleita noted.

She referred to earlier - and challenged - studies contending that “biofuel production is not significantly more carbon-neutral than gasoline as a liquid fuel, and in fact may consumer more energy in the production than it generates”.

Kaleita does cite criticism that those studies used outdated data and assumptions, pointing out that “when updated information is used, biofuel production appears to generate less overall emissions”.

Still, she said, a slight reduction in greenhouse gases does not justify the federal subsidies and tariff protections now provided for corn-ethanol.

For one thing, she argues that it is not clear that biofuels provide a net environmental gain when their emissions of smog-related compounds and other potential air pollutants are weighed.

“For example, simulations by a Stanford atmospheric scientist found that while E-85 vehicles reduce atmospheric levels of two carcinogens, benzene and butadiene, they increase that of two others, formaldehyde and acetaldehyde.”

“Furthermore, the study found that expanded use of E-85 would significantly increase ozone, a key component of smog,” she added.

The analysis also noted that “evidence is mounting that at least in the near term, biofuels derived from agricultural crops may do more harm than good” by increasing land area use along with greater applications of fertilizers and herbicides, posing a threat to water quality.

“These concerns have not stood in the way of government endorsement of biofuels, regardless of source,” Kaleita said.

Instead of incentivising electric vehicles and biofuels, Kaleita offers policy suggestions that could “green” automotive use.

“Overall, the automobile option with the smallest environmental footprint is the idealised situation of using clean energy to charge a high-performance battery for small-distance city drivers,” she said.

But that ideal situation “is far from the current reality - and creating that situation will require significant investment in research and development into new and innovative technologies, and perhaps significant changes in infrastructure”.

To get there, Kaleita said that realistic principles should guide policymakers.

“Outcomes are more important than products,” she said.

“As exciting as the technology may be, electric vehicles are not universally helpful; in many situations they are inappropriate and lead to minimal environmental benefits at best and negative impacts at worst,” she added.

“Until and unless the energy sector is less reliant on high-carbon sources, there should be no government incentives to expand consumer purchases of these vehicles.”

Second, “renewable fuel policy must incorporate a holistic approach”, she argues.

“Many biofuels - notably, the most common biofuels in the US, sourced from corn and soybeans - can have significant negative environmental impacts,” Kaleita said. “The current renewable fuel standards and goals thus pose threats to overall environmental health.”

Lastly, the study argues against biofuel subsidies.

“Government investment needs to spur technological development, not simply entrench and institutionalize first-generation efforts,” she said.

“Biofuel subsidies, for example, may create a new energy sector that, rather than being viable as a self-sufficient industry, remains largely reliant on subsidies,” she added.

While policymakers say that biofuel subsidies and tariff protections eventually should be phased out, “the history of entrenched subsidies in the US suggests that phase-outs always will remain a plan for some time in the future - they are rarely implemented”.

“Both biofuels and electric vehicles are highly incentivised by federal actions, yet the environmental benefits of both remain questionable,” Kaleita concluded.

“Encouraging innovation and continued technological development will be more effective in the long run at addressing the environmental footprint of American automobiles than government programmes that essentially mandate specific approaches,” she said.

($1 = €0.73)

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy


By: Joe Kamalick
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