Oil and Biofuels Interests Square Off Over Report

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A recent report in preparation for the 12th International Energy Forum’s ministerial, scheduled in Cancun, Mexico later this month, studies and assesses the potential and limitations of biofuels.

Criticized by the Global Renewable Fuels Alliance (GRFA) as “self serving,” the report suggests that mounting evidence from research and analysis shows that the demise of the fossil fuel era is nowhere in sight and cautions against the widespread adoption of biofuels.

Authored by Claude Mandil, the former executive director of the International Energy Agency, and Adnan Shihab-Eldin, the former acting secretary general of OPEC, the report examines the extent to which biofuels could contribute meaningfully to meeting a substantial portion of future demand in the transportation sector.

The report also hurls a slew of criticisms at the industry, including:

  • Greenhouse gas emissions – the report argues that most first generation biofuels have (at best) a marginal net impact on GHG emission reduction, and in some cases, lead to increased emissions.
  • Biodiversity – prolonged dependence on first generation crops for biofuel production could result in an increased risk of deforestation, which, when combined with the conversion of grasslands and savannahs to biofuel crops, could have a negative impact on biodiversity.
  • Water – the use of fertilizers and pesticides are also to be considered while evaluating the impact, the report mentions.
  • Food vs. Fuel – another major concern with biofuels development is its competition with food crops and the risk of food price increases due to the conversion of existing food crops into biofuel production and future competition for arable land.  The report points out that there is converging evidence that part of the price increase certain food crops observed in recent years was due to biofuels development, but it is difficult to quantify the impact accurately.  The report calls for a careful assessment of the food crop price risk and its impact on poor populations in developing countries.

The report seems to endorse the current Brazilian model.  Within the first generation of biofuels, and taking into account the various above-mentioned concerns, only ethanol produced from sugarcane in Brazil appears acceptable, yet only if the future sugarcane farming for ethanol production continues to follow current practice and avoids extension to areas that might raise the issue of harmful direct and indirect land use changes.

All the other biofuel crops currently in commercial production offer poor GHG results, (e.g. corn ethanol), at very high prices or with unacceptable environmental impacts (e.g. palm oil diesel), the report adds.  And it further cautions that most of the initially established biofuel production targets are either too ambitious or unsustainable over the long term.

The authors did concede that the next generation biofuels currently under development, such as cellulosic ethanol, renewable diesel, biomass-to-liquids or Fischer-Tropsch liquids, made from solid bio-waste (agricultural, forest or municipal), grasses, woods, waste paper and/or algae hold better promise.

Bliss Baker, spokesperson for the Global Renewable Fuels Alliance argues that the research was an attempt to slow down biofuels production:

This report would be laughable if the risks associated with our dangerous reliance on oil were not so serious.  OPEC has dedicated its history to keeping oil prices artificially high and combating any threat to the shocking wealth of its members.  It was only a matter of time until it attacked biofuels.

According to a report from Merrill Lynch, “retail gasoline prices would be $21/bbl higher, on average, without the incremental biofuel supply.”

Countries around the world are expanding their biofuels production to meet increased energy needs at the same time as addressing growing greenhouse gas emission concerns that lead to global climate change.  In 2009, global biofuels production exceeded 80 billion litres.

Mackinnon Lawrence is an attorney, principal consultant with Biomass Advisors, and editor & publisher of Biomass Intel.

photo: CesaraStudillo

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