Biofuel and advanced biofuel.

AuthorReitze, Arnold W., Jr.
PositionI. Introduction into IV. Advanced Biofuels, p. 309-338
  1. INTRODUCTION II. RENEWABLE FUEL REQUIREMENTS III. THE ADVERSE EFFECTS OF USING ETHANOL AS FUEL A. Air Pollution B. Net Energy C. Water D. Land Use E. Cost of Food IV. ADVANCED BIOFUELS A. Ethanol From Cellulose B. Biodiesel V. OTHER BIOFUELS VI. BIOFUEL SUBSIDIES VII. CONCLUSION I.

Introduction

Early in the 20th Century it was recognized that ethanol was not just for drinking, but could be used to power vehicles. In 1908 ethanol was used to fuel the Model T Ford. (1) In 1925, Henry Ford called ethyl alcohol the fuel of the future. He also believed converting corn into alcohol would help ease the economic crisis for farmers that would later morph into the Great Depression. (2) Thus began the concept of using motor vehicle fuel policy to subsidize farmers. The use of biofuel did not gain traction, but some alcohol fuel production occurred during World War II. In the 1940s the U.S. Army built and operated an ethanol plant in Omaha to produce fuel for the army. (3)

In 1973 the Arab members of the Organization of Petroleum Exporting Countries (OPEC) imposed an embargo on petroleum exports to the United States. (4) This led to Congress developing an interest in supporting a renewable fuel industry. (5) Renewable fuel is defined as "fuel that is produced from renewable biomass and that is used to replace or reduce the quantity of fossil fuel present in a transportation fuel," (6) or "in home heating oil or jet fuel." (6) In 1974 the Solar Energy Research Development and Demonstration Act provided support for research and development of conversion of cellulose into fuel. (7) The Clean Air Act (CAA) Amendments of 1977 expanded EPA's authority to regulate fuels. (8) In the 1980s, however, nearly all the limited federal support went to incentivize ethanol production from corn. (9) This resulted in a rapid expansion of ethanol production with over 100 corn alcohol production plants by the mid-1980s. Subsequently, most ethanol plants closed due to a worldwide over supply of petroleum at a relatively low price. (10)

The CAA Amendments of 1990 provided a boost for ethanol production, (11) by requiring the use of oxygenated fuels during the winter in 39 carbon monoxide nonattainment areas. (12) Additional oxygen in fuel, which alcohol can supply, improves combustion. (13) The 1990 CAA Amendments also required the production of reformulated gasoline (RFG) that met specified chemical requirements, including having an oxygen content equal to or greater than two percent by weight. RFG was to be used in nine specified severe ozone nonattainment areas and in other severe ozone nonattainment areas that might be subsequently designated. (14)

II.

Renewable Fuel Requirements

The Energy Policy Act of 2005 (2005 EPAct) was the first federal law that required motorists to purchase first generation renewable biofuel blends (RFS1), which used corn and soybeans as the feedstock. (15) The EPAct also amended CAA [section] 211(k) to eliminate the oxygenate requirement for RFG, (16) but added renewable fuel requirements that were codified in a new CAA [section] 211(o). (17) On May 1, 2007, EPA promulgated regulations to implement the 2005 EPAct. (18) The Energy Independence and Security Act of 2007 (EISA) significantly modified the EPAct's renewable fuel requirements. (19) EISA increased the mandatory use of renewable fuel. The renewable fuel volume requirements were expanded to include all transportation fuel except fuel for ocean-going vessels. (20) EISA imposed requirements for "second generation" renewable fuel (RFS2), which include cellulosic ethanol, ethanol from crop and animal waste, biomass-based diesel, and other feedstock. (21) Cellulosic biofuel is a subset of advanced biofuel and is defined in the 2007 Energy Act's section 201, which is codified in the CAA's section 21l(o)(l), as renewable fuel derived from cellulose, hemicellulose, or lignin derived from renewable biomass. Regulations to implement the 2007 Act were promulgated in 2010. (22) The petroleum industry's subsequent challenge to these regulations was unsuccessful. (23)

EISA's goal is to "move the United States toward greater energy independence and security, to increase production of clean renewable fuels, to protect consumers, to increase efficiency of products, buildings, and vehicles, [and] to promote research on and deploy greenhouse gas capture and storage optionsFalse" (24) As discussed below, the contribution of biofuels to achieve these goals has been modest. The primary accomplishment of the renewable fuel mandate in EISA has been to transfer wealth from the American consumer to the corn-based ethanol industry. (25)

The renewable fuel requirements call for 4 billion gallons of renewable fuel to be used in gasoline in 2006 and the amount increases in steps each year to 36 billion gallons in 2022.26 Thereafter EPA will set the applicable annual volumes. (27) Renewable fuels include ethanol produced from grain, starch, oilseeds, vegetable, animal or fish materials, sugarcane, sugar beets, sugar components, tobacco, potatoes, or other biomass. (28) Renewable fuels also include natural gas from biogas sources, cellulosic ethanol, and biodiesel from plant or animal wastes. (29) EPA periodically approves feedstock and processes that can be used to produce renewable fuel that satisfies the requirements of CAA section 211(o). For example, on December 17, 2012, EPA approved ethanol from grain sorghum as a renewable fuel, and if approved processes are used, it qualifies as an advanced biofuel. (30) Approved fuels and processes are codified at 40 C.F.R. [section] 80.1426.

Each of the categories of biofuel is required to meet lifecycle requirements based on its GHG emissions compared to 2005 gasoline or diesel, whichever the biofuel is replacing. (31) The lifecycle requirements include the need to consider all stages of production, distribution, and use by the ultimate consumer. (32) The most controversial requirement is that the lifecycle analysis must consider significant indirect emissions from land use changes. (33) For renewable fuel facilities that commence construction after December 19, 2007, a reduction of 20 percent in GHGs is required. Advanced biofuel and biomass-based diesel must achieve a 50 percent reduction; cellulosic biofuel must achieve a 60 percent reduction. (34) EPA, however, may modify these percentage reduction requirements. (35)

The CAA specifies the required annual volume of renewable fuel that must be blended into transportation fuel that is refined, blended, distributed, or imported. (36) EPA has determined that the primary responsibility for compliance falls on refiners and importers. (37) The volume of renewable fuel required is based on a party's actual annual gasoline production in relation to the statutory amount of renewable fuel that is required to be blended. (38) The CAA authorizes EPA to modify the requirements through a renewable fuel standard issued each year specifying the volume of renewable fuel required in each biofuel category. (39) Upon the receipt of a petition by a state or any person subject to the renewable fuel requirements, or on its own motion, EPA may modify the volume requirements if the economy or environment of a state, a region, or the United States would be severely impacted, or if there is an inadequate domestic supply of fuel. (40) Advanced biofuels are subject to additional waiver provisions. (41) To obtain a waiver the evidence must demonstrate to a high degree of confidence that the RFS is the cause of harm to the economy or the environment, and the harm must be severe. (42) As discussed below, EPA missed the deadline for issuing production requirements in 2012, 2013, and 2014, and plans to issue 2014, 2015, and 2016 requirements in 2015. (43)

The CAA includes a production credit program that allows an obligated party to over-comply and obtain credits that it can use or trade to another obligated party. (44) To facilitate compliance with the statute's requirement, obligated parties must obtain a Renewable Identification Number (RIN) that is created for the volume of each batch of renewable fuel produced or imported. (45) The values for the various fuels are adjusted based on their energy content relative to ethanol. Corn ethanol is designated 1.0, biobutanol is 1.3, biodiesel (mono alkyl ester) is 1.5, nonester renewable diesel is 1.7, and cellulosic ethanol and waste derived ethanol is 2.5. (46)

In 2007, EISA separated the required volume of renewable fuel into four overlapping categories with nested volume mandates...

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