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Analysis: New RFS law already under fire

By ROSALIE WESTENSKOW, UPI Correspondent   |   Feb. 8, 2008 at 7:15 PM
THE DALLES, Ore., Feb. 8 (UPI) -- Just weeks after passing a major energy bill, some congressional leaders are questioning whether certain portions of the law are achievable.

The biggest concerns hinge on the Renewable Fuel Standard established by the Energy Independence and Security Act of 2007, a massive piece of legislation signed by the president on Dec. 19. The provision mandates increasing amounts of biofuels be produced and mixed with domestic gasoline. The dictated volume grows steadily each year, requiring a nearly eight-fold increase overall from last year's production of 4.7 billion gallons to 36 billion gallons in 2022.

While the law as a whole has the potential to significantly decrease U.S. dependence on foreign oil and domestic greenhouse gas emissions, the RFS provision could prove difficult to enact as it is currently constructed, said Sen. Jeff Bingaman, D-N.M., at a hearing Thursday in the Senate Committee on Energy and Natural Resources.

"First, early year biofuel requirements could be too aggressive; second, mandates for specific technologies and feedstock could prove to be overly prescriptive; finally, the environmental restrictions may be too narrow," said Bingaman, chairman of the committee.

The RFS requires biofuel production to almost double in 2008 alone. While Bingaman said he's confident the biofuels industry can produce the 8.5 billion mandated gallons, getting it to consumers presents a daunting task.

"It is not clear how all of this biofuel will find its way into the fuel tanks of our cars and trucks," Bingaman said. "Because the law was signed only weeks before the 2008 requirement came into effect, refiners had no opportunity to ensure that sufficient infrastructure would be in place to handle that much of an increase."

Indeed, representatives of the petrochemical and refining industries say the infrastructure needed this year alone cannot be built quickly enough.

Currently, most of the biofuels used domestically are consumed in the East Coast, West Coast, upper Midwest and Texas. But in order to meet the RFS, biofuels must be blended into gasoline sold all over the country, said Charles Drevna, president of the National Petrochemical and Refiners Association, an advocacy group for the industry.

"When you start going beyond these traditional areas, it is a very, very difficult and expensive proposition to get" biofuels to consumers, Drevna told United Press International. "The cost of transporting renewable fuels to gas stations could reach 13 cents to 18 cents per gallon."

Ethanol, the major biofuel used today, cannot be transported via pipeline, like conventional fuels, because of its corrosive properties and its ability to absorb the water commonly present in pipelines, rendering it unusable.

However, ethanol industry advocates say the infrastructure challenges are not insurmountable. The industry has established a "virtual pipeline" using the rail system, barges and trucks, said Bob Dinneen, president of the Renewable Fuels Association, a trade association for the industry.

"We can move product quickly to those areas where it is needed," Dinneen told senators Thursday.

A new ethanol distribution center in Manley, Iowa, will provide needed infrastructure, Dinneen said. By the end of 2009 more than 75 ethanol plants are expected to be operating within 275 miles of the terminal, producing about 5 billion gallons per year.

While the infrastructure challenges loom large, other concerns also surround the new RFS, including the environmental impacts of increased biofuels production.

The most commercially viable and commonly consumed biofuel today is ethanol, produced mainly, in the United States, from corn. Unfortunately, converting more land to grow these crops for ethanol could increase soil erosion, greenhouse gas emissions and fertilizer runoff, as well as disrupt food supply, according to several studies.

The increased demand for ethanol that will result from the new RFS could also potentially prolong our reliance on other countries for fuel, said Mark Muller of the Institute for Agriculture and Trade Policy, a non-profit advocacy group.

"This could lead to removing the tariff on Brazilian ethanol, resulting in a floodgate of cheap Brazilian ethanol driving down the domestic ethanol price, and thwarting U.S. efforts to become more energy independent," Muller told UPI.

That's unlikely, said Brian Jennings, executive vice president of the American Coalition for Ethanol.

"We have such a tremendous potential to produce fuel in the United States that the demand can be met domestically," he said.

Ethanol won't be the only fuel used to satisfy the RFS, though. By 2022, 21 billion of the 36 billion gallons of mandated biofuels must come from "advanced sources" produced from wastes, debris and non-food crops.

To date, significant volumes of fuel have not been produced from any "advanced sources," but they hold huge potential, according to several sources. One study, conducted by the Oregon Environmental Council, found 84 million gallons of ethanol could be produced annually from the state's wheat residues.

However, there are concerns that key fuel sources have been excluded from the bill. The most egregious of these is woody biomass derived from federal forest lands, said Carol Werner, executive director of the Environmental and Energy Study Institute, a non-profit organization.

Forests cover one-third of U.S. land, and much of that area could be routinely thinned of debris -- reducing fire hazards and providing material for fuel, Werner said.

"Unfortunately, these provisions eliminate an opportunity to support hazardous fuels reduction (and) reduce the number of possible cellulosic (sources) for production of renewable fuels," Werner told senators Thursday.

The potential amount of woody biomass excluded by the provision is no paltry figure. According to a study conducted by the Department of Energy and Oak Ridge National Laboratory in 2005, 1,996 million dry tons of forest biomass could be gleaned by thinning areas with a high fire risk in national forests alone.

Although the law technically allows biomass from high fire risk areas to count toward the RFS, "high fire risk" is defined as "being next to an occupied building," effectively eliminating most federal forest land, said Matt Letourneau, Republican communications director for the Senate Energy Committee.

Although no plans have been formally made to alter the law, Congress could potentially pass a corrections bill to iron out some of the difficulties in implementing the RFS, Letourneau said.

"There's been talk of making some technical corrections anyway," he told UPI. "(And) there are also potential opportunities to attach language to other legislation."

Whatever Congress decides to do, it's clear implementation will be a challenge, said Sen. Pete Domenici, R-N.M.

"I think it is pretty obvious that either a lot of good administrative people will have to get together and resolve this in a way that would be extraordinary or we'll have to end up changing things," Domenici said.

© 2008 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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