White House seeks to speed advanced biofuels

The Obama administration on Tuesday took steps to promote biofuels and is expected to publish a proposal for measuring the environmental impact from biofuels, in a move likely to spark a debate within the industry.

The administration has created the Biofuels Interagency Working Group, which is tasked with helping the ailing biofuels industry and creating policies to improve the environmental sustainability of biofuels. Measures include making money available to refinance existing biorefineries or to make them more energy efficient.

During a conference call on Tuesday, Energy Secretary Steven Chu announced the availability of $786.5 million for biofuels research and to accelerate commercialization of advanced biofuels, such as ethanol from wood chips and grasses.

The bulk of the money--$480 million--will be made available in grants to demonstrate "integrated biorefinery technologies" where refineries use alternatives to fossil fuels to operate, such as biofuels and combined heat and power systems. Of the total, $130 million will go toward research, including the creation of an algae biofuels consortium and a group dedicated to biofuels compatible with the existing infrastructure.

Later on Tuesday, the Environmental Protection Agency will publish a proposal for rules on how to assess the greenhouse gas emissions from biofuels, EPA director Lisa Jackson said during the call. The 2007 Energy Independence and Security Act (EISA) required the EPA to do a lifecycle analysis of biofuels' greenhouse gas emissions compared with petroleum fuels.

Representatives from the biofuels industry said that they are pleased with the creation of the working group and that the EPA has moved ahead on the lifecycle assessment process. But they are wary that including land use changes in measuring biofuels' environmental impact could hurt the industry, even for fuels considered less polluting than corn ethanol.

During the call, Jackson said that the EPA analysis found that corn ethanol reduces greenhouse gas emissions 16 percent compared with gasoline. Different factors, such as what fuel is used at the refinery, affect the overall impact.

"We were concerned that the EPA ruling would have a chilling effect on the whole industry," said Paul Winters, the director of communications of the Biotechnology Industry Association. "We do expect the announcements will give people the confidence to keep investing in advanced biofuels."

However, Winters said that biofuels companies will be participating in the EPA's comment period to delve into the details of the greenhouse gas analysis, particularly a controversial indirect land use factor.

Under the 2007 EISA, biofuels makers need to reduce lifecycle greenhouse gas emissions of their products in the coming years on a scale that ranges from 20 percent for corn ethanol producers to 60 percent for different advanced biofuels.

The increased demand from government biofuels mandates has led to farmers devoting more land to fuel crops and, in other countries, the destruction of rain forests for farming. But biofuels producers oppose including indirect land use into the environmental analysis, said Brooke Coleman, the executive director of biofuels industry group New Fuels Alliance.

Land use policies should be addressed directly in biofuels policies, rather than adding to the greenhouse gas score of biofuels producers, he said. In addition, the indirect land model isn't a fair comparison because the indirect land use of petroleum or power generation industries isn't considered, he argued.

"There's a breaking point of how hard you can push a new industry. You're already requiring these new fuels to be 20 percent to 60 percent better than status quo. Then if you look at the ripple effect (of land use) that you're not doing for petroleum or natural gas, then you're really pushing a fledgling industry really hard," Coleman said.

Some environmental groups said that he EPA's proposal opens a public discussion on indirect effects of biofuels, which will need to be addressed sooner or later.

"To ignore it is going to really tilt the playing field in a direction that is going to send the industry off in a direction that will have to be reversed later and will be counterproductive," Jeremy Martin, a senior scientist at the Union of Concerned Scientists' clean vehicles program, told Reuters.

The Natural Resources Defense Council's director of renewable energy policy, Nathanael Greene, said the EPA is taking the right approach to lifecycle analysis because biofuels have the potential for environmental harm.

"It is imperative that we develop biofuels the smart way, and we are encouraged that EPA Administrator Jackson has offered a science-based proposal to get this done. If we get the rules of the road right through policies such as this one, we can harness the ingenuity of America's farmers, foresters, and entrepreneurs to create a new generation of biofuels that will help create jobs and end our dependence on oil," he said in a statement.