Biofuel Subsidies Need Reform
- December 27, 2011
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Americans want the U.S. to lead the world in renewable energy, but these are screwy times in our nation’s capital. Some people are trying to turn clean, renewable energy into something dirty. The fossil fuel industry and the radical right, including Grover Norquist and politicians looking to score cheap political points, are taking on key policies that level the playing field for renewables. Everything from renewable electric standards passed by 29 states to the Production Tax Credit for renewables is under attack.
But just like a broken clock is right twice a day, these people trying to stop renewables occasionally get things right. That’s the case with the impending expiration of the main corn ethanol tax credit. Despite Norquist’s initial defense of the subsidy, at the end of the day, not even the millions the corn ethanol industry spent on lobbying could stand up against the evidence: the VEETC was redundant and wasteful, throwing billions in scarce taxpayer dollar towards another dirty fuel.
Given that tax extensions are almost automatic and that Big Oil and Big Ethanol remain extremely powerful interest groups, this is a huge victory for average Americans and common sense. The end of the VEETC clears the way for us to think about how we can focus Federal funding on American innovation so we can have a real alternative to oil instead of trading the perils of oil for the higher food prices and dirtier air and water that come with corn ethanol.
We all know we need a clean alternative to oil. Our dependence on oil hurts our economy, helps our adversaries and puts our security at risk. Each day we send over $1 billion overseas for oil, often to hostile nations like Iran, Libya, Iraq, Venezuela and Saudi Arabia. With more renewable, made-in-America energy, we can reduce the money we send to foreign countries – including those that don’t support our interests or way of life.
The cars we drive, our airplanes, school buses, construction and farm equipment will all demand liquid fuels for many years to come. This means that low-carbon liquid alternatives to oil are arguably not something we can do without.
Corn ethanol was meant to be a stepping stone to these better biofuels. But while the corn ethanol industry has paid lip service to the potential of next generation cellulosic biofuels, its lobbyists have spent their time pushing for more giveaways, whether in the form of tax credits or costly loan guarantees for infrastructure that would lock more corn ethanol into the market.
The first and most important step in moving towards the biofuels we need is to stop funding mature, conventional, and dirty biofuels. The end of the VEETC marks an important turning point on this front.
Second, the entrepreneurs and innovators in the advanced biofuels industry all say that the Renewable Fuel Standard is critical to getting their fuels out of the lab and into the market place. But to be effective, the RFS and its implementation need to be strengthened and improved over time. This includes ensuring that GHG’s remain a core plank in evaluating the environmental performance of fuels and that any assessment of the GHG impacts of biofuels continues to include emissions from indirect land use change. It also means protecting the advanced and cellulosic ethanol carve-outs in the RFS from being taken over by corn-based biofuels.
Third, we must support the production of responsibly-grown energy crops that don’t compete with our food or feed supply. This means protecting and watchdogging programs like the Biomass Crop Assistance Program, which help farmers grow the sustainable biomass that’s critical to sustainable biofuels. No matter how efficient and clean a biofuels refinery gets, it cannot turn unsustainable biomass into a sustainable biofuel.
Next, we need to use the power of our purchases to pull the best sustainable biofuels into the market. Here, it’s our military that’s leading the way. The military’s top leaders agree that that we must expand our country’s renewable energy sources if we’re going to keep our nation secure and adequately support our troops. From the battlefields to the barracks, the military is working to do just that. The latest example is a 3-year, $510 million dollar plan to make long-term purchases of advanced biofuels, which was kicked off by the Navy early in December. A Defense Department procurement specification that could be used by other companies, cities and states would be a great way to leverage the military’s leadership even further.
And finally, we need to reform biofuel tax credits so that American taxpayers get real clean energy for their money. Unlike the VEETC, which paid for volumes without requiring measurable environmental performance, a Greener Biofuels Tax Credit would be technology neutral and performance-based. That means it would reward biofuels producers for not only running their plants efficiently, but also for choosing environmentally preferable feedstocks—such as wastes, sustainably harvested cover crops or perennial energy crops like switchgrass and willow, and algae—that require little land disturbance, fertilizer, or irrigation to grow and thereby greatly reduce GHG emissions.
These four steps will do a lot to level the playing field for clean, renewable, advanced biofuels that can be produced here at home and will never run out. In the next 3 to 5 years, we need to get the first billion gallons of the best biofuels into the market.
America has led every major technological revolution over the last 100 years, from airplanes to the internet, and sold the products from these advances to the world, making us richer and improving our lives. Why shouldn’t America lead the clean energy revolution as well?
America has a choice next year and in the years ahead. We can allow fossil fuel companies, entrenched special interests, and their supporters in Congress to block our progress on renewable energy and take our country in a direction Americans don’t want to go. Or we can move forward with building a future that secures America’s leadership in homegrown renewable energy, drives economic growth and jobs, and provides a cleaner, healthier life for us and our children.
Which way do you want to go next year?