The U.S. government has thrown billions of dollars in support behind the biofuels industry, in the form of mandates and loan guarantees (and, again, here), in the hopes of weaning the country off foreign oil and cutting greenhouse gas emissions.
But a recent study by economists at Oregon State University says that the use of biofuels, as mandated in the EPA's Renewable Fuel Standard, would barely put a dent in fossil fuel consumption, and would likely increase greenhouse gas emissions.
Further, the study finds that imposing a gas tax and implementing energy efficiency improvements would be a far more cost-effective means of meeting these goals than continuing the current biofuel subsidy programs.
Conventional wisdom – fed by industry lobbying – has held that biofuels are a "carbon-neutral" fuel because the carbon dioxide that's emitted during combustion is equivalent to what the crops absorb from the atmosphere while they are growing.
But according to Bill Jaeger, a professor in the agricultural and resource economics department at Oregon State and lead author of the study, biofuels lose their carbon neutrality when fossil fuels are used to transport biofuels and when farmers use nitrogen fertilizers (made using natural gas) to grow biofuel feedstocks.
Additionally, using valuable farmland for growing biofuel feedstocks can push food production onto previously uncleared land, which releases carbon accumulated in soil and vegetation.
The study, "Biofuel Economics in a Setting of Multiple Objectives & Unintended Consequences," published in Renewable and Sustainable Energy Reviews, focused on corn ethanol, soybean biodiesel, cellulosic ethanol from switchgrass grown in the U.S., canola biodiesel produced in Europe and sugarcane ethanol produced in Brazil.
The findings indicate that reducing gas consumption by 1 percent by transitioning to U.S.-produced biofuels would cost between 20 and 31 times more than achieving the same result with energy efficiency measures.
The study also reported that combining a gas tax increase with energy efficiency improvements could reduce U.S. fossil fuel use by more than 15 percent.