Lentis/Politics of Biofuels

Introduction

Biofuels, liquid fuels made from biomass (living matter), have long been considered a renewable energy source. They are often used in transportation to reduce pollution via blending with traditional fuels or in some cases they can act as a complete replacement. In fact, most gasoline in the U.S. contains 10% ethanol, a common biofuel made from fermenting corn or sugarcane. Biodiesel, another biofuel, is made from animal fats and vegetable oils and is blended with traditional diesel. These traditional fuel alternatives are usually associated with reduced greenhouse gas emissions, increased engine performance, and increased prosperity for farmers.

Although the term biofuel can refer to solid biofuels like wood and charcoal, this chapter is focused predominantly on liquid biofuels.

History

Biofuels have existed long before their use in transportation. The process of fermenting plant mass to create ethanol to make drinks can be dated back to 4000 BC. Similarly, the vegetable oils and fats used to make biodiesel were used in oil lamps in the late 1700s. However, ethanol fuel blends were used early on in some combustion engines in the 1800s in the U.S. Despite this, kerosene and oil grew as a major fuel source in the U.S. due to an alcohol tax imposed in 1864 to raise funds for the Civil War. Originally intended to affect drinking alcohol, it also affected the consumption of ethanol for fuel purposes.

Notably, Henry Wallace, the secretary of agriculture in the 1930s, argued that if a law required 10 percent of fuels burned to be made of alcohol derived from corn, then the American corn market would flourish, especially if petroleum became a scarce resource. Midwest legislatures passed some requirements to mix ethanol into gasoline (called agrol), however, a federal version of these laws was defeated with many citing the oil industry's lobby.

As of today, biofuels like ethanol are used in consumer transportation fuels and their rise can be attributed to politics and government activity around this industry, namely in the form of tax credits/incentives, biofuel development funding, and mandates.

Relevant Legislation

The rise of biofuels in the U.S. is linked to the passage of several pieces of legislation.

Energy Tax Act of 1978

The Energy Tax Act of 1978 was passed in response to the energy crisis of 1973 in which the U.S. had an oil embargo placed against it. Dependence on the importation of oil for energy was revealed and the U.S. hoped to become less dependent on oil through fuel efficiency and renewable energy. To promote the use of domestic biofuels like ethanol, this act created a federal excise tax exemption of $0.04 per gallon of fuel containing at least 10% alcohol (ethanol).

Energy Policy Act of 2005

The Energy Policy Act of 2005 notably increased the amount of ethanol mixed in gasoline and set targets for biofuel consumption up to 2012. This established the Renewable Fuel Standard which required fuels to have a minimum volume of renewable fuels. It further increased tax reductions for renewable electricity production and alternative fuels which includes biofuels. This was passed to increase energy production and significantly increased the production of biofuels.

Energy Independence and Security Act of 2007

The Energy Independence and Security Act of 2007 aimed to make the U.S. more energy independent through increased production of renewable fuels. It extended the Renewable Fuel Standard (RFS) biofuel production targets up through 2022. Additionally, it enabled the research of advanced biofuels using algae and biodiesel.

Issues Around Biofuels

Biofuels, though renewable, are not without environmental and economic concerns.

Food

Many of the crops used for biofuels, such as corn and soybeans, are also used for food products. As such, biofuels rely on siphoning material away from food production, leading to price increases for nearly all grown food products, as even non-fuel crops must compete for farm space.

The global food market depends on the production of a few "breadbasket" regions, and the worldwide price of food can be heavily affected by poor conditions, such as droughts. In 2007, a combination of poor weather in many regions alongside an initiative for increasing biofuel production led to global food prices rising by 83%.

Land Use

Large amounts of land are needed for farm space, and farming is one of the leading causes of deforestation. While difficult to quantify, the subsequent increase in greenhouse gas emissions from deforestation may serve to act against biofuels' lower emissions compared to alternatives.

Cost & Environmental/Carbon Analysis

Biofuels such as ethanol and biodiesel tend to be more expensive to produce than their alternatives. Pesticides and fertilizers used in farming can lead to pollution, and biofuel production is not necessarily a clean process, as most biofuel producers still use fossil fuels for combustion. Despite typically burning cleaner, ethanol's evaporative emissions tend to be higher than gasoline out of fuel tanks. While biofuels can theoretically be "carbon-neutral", depending on the crop, the CO₂ emissions from the production and burning of biofuels is not offset by the CO₂ absorbed during plant growth, especially if forests were cleared in the process of production.

Participants

There are numerous participants involved in the politics of biofuels, whether they be departments, agencies, or offices within governments or organizations not affiliated with the government.

Participant Groups within Governments

One participant tied to the U.S. government is the Department of Energy (DOE), and the Bioenergy Technologies Office (BETO) within this department supports research and development that enables biofuel technology development. The U.S. Department of Agriculture (USDA) also contributes through the Farm Service Agency (FSA) providing financial assistance through the Biomass Crop Assistance Program (BCAP) to owners of agricultural and non-industrial private forest land for the production of biomass feedstocks. Additionally, the RFS Program is administered by the U.S. Environmental Protection Agency (EPA).

In 2023, the U.S. had the highest production of biofuel (1,795.1 PJ) than any other country, with Brazil having the second-highest (1,015.6 PJ) and Indonesia having the third-highest (433 PJ). In Brazil, this is overseen by the Brazilian National Agency for Petroleum, Natural Gas and Biofuels (ANP), and in Indonesia, this is overseen by the Ministry of Energy and Mineral Resources.

Despite producing the greatest amount of biofuel in 2023, the U.S. was not among the top ten in regards to the amount of biofuel exported internationally. The top biofuel exporter in 2023 was Canada ($3.17 billion), with the United Kingdom as the second-highest ($409.94 million) and the European Union as the third-highest ($366.48 million). The statistics on U.S. biofuel production and export amounts indicate that the U.S. has a focus on using biofuels domestically.

Other groups that affect laws concerning biofuels are politicians and the voters who support them. However, the support or opposition of biofuels or biomass energy is not strongly tied to Democrat and Republican views: when taking the percentage of those with a favorable view of the energy source subtracted by the percentage of those who have an unfavorable view of it in 2022, biofuel is 24% for Democrats and 28% for Republicans; biomass energy is 23% for Democrats and 35% for Republicans. Comparatively, wind power is 72% for Democrats and 17% for Republicans, and oil is -27% for Democrats and 56% for Republicans.

Other Participant Groups

There are many non-governmental participant groups as well. One such group is conservationists; as noted above, there are detrimental environmental impacts that would increase with an increase in biofuel production. For instance, Friends of the Earth is an international (across 73 countries) environmental organization that opposes increased biofuel production under the RFS due to its rising impacts on the environment. In the U.S., this group has been responsible for many petitions as well as letters to key groups and individuals within the Legislative Branch.

Some support biofuel production in the same vein of being environmentally friendly. A major player in this is POET, the world’s largest biofuel producer, founded in 1987 in South Dakota. Other groups with this same motivation are organizations such as the National Corn Growers Association (NCGA), a non-profit organization that lobbies in the U.S. In 2024, the NCGA had a total lobbying expenditure amount of $250,000 (across 17 lobbyists), and their highest-spending year from 1998-2024 was in 2015 with an amount of $770,000 (across 12 lobbyists). Organizations that support landowners share the same goal, such as the Forest Landowners Association, which advocates for federal policies such as ones that affect market access and regulations.

Conclusion

Biofuels provide renewable, low-carbon energy primarily used in transportation in the U.S. The passage of laws and mandates, namely the Renewable Fuel Standard, have stimulated the growth and development of biofuels. However, issues around the food and land requirements for biofuel created debate over its efficacy. Environmentally, the process to create and use ethanol and biofuels can also have consequences. Within the U.S. many groups have vested interests in promoting or opposing biofuels.