A lawsuit brought by the environmental advocacy groups Friends of the Earth and National Wildlife Federation challenging EPA’s Renewable Fuels Standards was dismissed this week by the federal Court of Appeals for the District of Columbia.
That’s not necessarily big news. Environmental NGOs focus nearly all of their energies (and funding) on pursuing remedies in the courts. In the absence of any tidal wave of political will, that’s how they move the needle, how they use judicial injunction to do in a day what takes years via the legislative process.
What is news is that the eco-groups voluntarily ended their challenge, filing a motion with the court to withdraw from the case after the legal briefs had already been filed and just one day before oral arguments were to be heard.
Their withdrawal leaves only the National Chicken Council, the National Meat Association and the National Turkey Federation as plaintiffs challenging the 2010 Renewable Fuels Standards. The biofuels industry, represented by Renewable Fuels Association and Growth Energy (intervenors in the case), argued that the case should be dismissed on both procedural and substantive grounds.
“In the absence of the tax incentive, what is providing the foundational demand for the ethanol industry is the Renewable Fuel Standard,” Bob Dinneen, the Renewable Fuels Association president and CEO, said in a statement. “We think that program has proven to be tremendously successful in reducing our nation’s reliance on imported oil.”
Dinneen noted that the environmental groups’ challenge to the RFS was much broader than the poultry groups, including that EPA had not taken into account the “global rebound effect” of ethanol driving down the price of oil, which supposedly forced developing countries to consume more oil. “That is how silly the environmental claims were,” he said.
Ramping up production
All that’s left of the lawsuit now is a narrow issue regarding how EPA grandfathered ethanol plants built in 2008 and 2009 and whether those plants meet the requirements needed to obtain credits under the program. “We are hopeful that the court will act quickly to uphold this remaining element of the rules,” Dinneen said, “to create a stable environment for investment in renewable fuel facilities.”
Therein lies the problem: Our investment in centralized biofuel production isn’t paying the dividends its supporters assured us it would.
In accordance with the 2007 Energy Independence and Security Act, the volume of renewable fuel—meaning corn-based ethanol primarily—required to be blended into U.S. motor vehicle fuel will be increased to 36 billion gallons over the next decade—four times the original amount set by the law. Yet the only real requirements as to whether such a huge diversion of agricultural resources actually represents a net positive “for achieving significant reductions of greenhouse gas emissions [and] reducing imported petroleum,” as EPA has stated, is that the agency must apply a lifecycle greenhouse gas analysis to ensure that ethanol and biodiesel refined from food and feed crop sources emit fewer greenhouse gases than the petroleum they replace.
That’s a pretty low bar to get over.
Granted, there’s some substance to the claims by biofuel refiners that production of ethanol and biodiesel contributes to the U.S. economy. Theoretically, every dollar spent on domestic ethanol is a dollar that doesn’t go overseas to countries often hostile to our national security interests. Unmentioned in that calculation, though, is the amount of public subsidies required to keep biofuels competitively priced.
But the real bottom line, the go-to calculation that underpins the logic supporting the RFS isn’t an economic argument, it’s the contention that biofuels reduce our reliance on imported oil. That “fact” is proving to be suspect.
That’s because in order to get an accurate estimate of the amount of oil actually displaced by biofuels, it’s necessary to subtract all the petroleum-derived inputs (including conventional diesel) consumed in growing and harvesting the crops and refining the fuels themselves. That’s never done—not by politicians positioning themselves as “green” candidates and certainly not by the biofuel industry.
The reality is that even as ethanol production sucks up inordinate amounts of an agricultural commodity far better suited for food production, the gasoline growth curve has continued upward. Nationally, we’re using more gasoline and diesel—and thus importing more oil—than we were before our embrace of biofuels began.
Ultimately, our dependence on foreign oil is a problem related to demand, not supply. We can divert all the corn and soybeans we want into fuel production, but not only won’t it alleviate our oil addiction, but like those prescription drug ads, we’ll continue to suffer from side effects that are way worse than the so-called cure.
The opinions expressed in this commentary are solely those of Dan Murphy, a veteran food-industry journalist and commentator.