BCO 60 - November 2009

November 2009

Policy Updates

Research and Technology Updates

News Briefs

Senator Boxer Introduces Chairman’s Mark on Climate Protection Bill

On October 23, Senator Barbara Boxer (D-CA) introduced her chairman’s mark of the Clean Energy Jobs and American Power Act (S. 1733), a bill that would reduce U.S. greenhouse gas (GHG) emissions an estimated 20 percent below 2005 levels by 2020 and 83 percent by 2050. From a bioenergy, agriculture and forestry perspective, the bill would:

• Include biomass, landfill gas, and municipal solid waste in the definition of renewable energy sources;

• Establish a $500 million advanced biofuel challenge grant program for projects that reduce the carbon content of the biofuel by 60 percent or more and use sustainable biomass production practices;

• Require the President to establish a domestic offset credit program of up to 1.5 billion tons per year, whereby GHG emitters could purchase offset credits from agriculture or forestry projects that reduce or sequester emissions instead of reducing their own emissions;

• Recommend a wide variety of agricultural, forestry, and waste management practices for the President to consider for eligibility in the offset credit program;

• Provide some offset credits for eligible early actors;

• Require the Secretary of Agriculture to create a Greenhouse Gas Reduction Incentives Program to assist farm and forest owners in reducing emissions and sequestering carbon for projects not eligible to participate under the domestic off sets program.

The Senate Environment and Public Works Committee, chaired by Senator Boxer, held a series of hearings on the bill October 27-29. The committee is expected to begin considering amendments to the bill November 3. Senator Debbie Stabenow (D-MI) is drafting amendments that will address a number of additional agriculture and forestry issues.

House Hearing on Future of Advanced Biofuels

The House Agriculture Committee Subcommittee on Conservation, Credit, Energy, and Research held a hearing October 29 to examine the status and development of next generation biofuels including cellulosic and algae-based fuels. The Renewable Fuel Standard calls for 100 million gallons of cellulosic biofuel to be blended into the nation’s fuel supply in 2010, and steadily increasing amounts in following years, but the industry seems unlikely to meet the short-term challenge due to numerous obstacles. Lack of financing, feedstock production issues, technological challenges, and regulatory uncertainty are among the chief hurdles facing the industry. Subcommittee Chairman Tim Holden (D-PA) said, “The message we heard loud and clear today is that in this changing market, it is critical to build and strengthen public and private partnerships. If we are serious about the next generation of biofuels, we must seek constant and stable federal policies, do more to help spur private investment and encourage further research on feedstock development. I am optimistic about agriculture's continued role in promoting production and use of renewable energy here at home.” Witnesses included officials from the U.S. Department of Agriculture and representatives from the Algal Biomass Association, BP Biofuels North America, Coskata Inc., Mascoma Inc., and Osage Bio Energy.

Tax Credits for Older Biomass Power Plants Due to Expire

The roughly one cent per kilowatt-hour production tax credit (PTC) for electricity produced by biomass power plants placed in service prior to 2005 is set to expire at the end of this year. In a recent article in Biomass Magazine, Robert Cleaves, Chairman of the Biomass Power Association, wrote: “The truth is that these existing production tax credits remain the lifeline of the biomass power industry and are vitally important to its survival. If Congress does not extend these crucial tax credits, more than half of the existing biomass power facilities could be forced to shut down, and thousands of jobs would be lost.” (Biomass power plants placed in service since 2005 would not be affected and would continue to receive the PTC for ten years from the date the facility was placed in service.)

Companion legislation introduced in the House and Senate ( H.R. 2528 and S.870) would grant a five-year extension of the PTC to these older plants. Two other bills (H.R. 2626 and S. 1030) would double the PTC for biomass power producers, bringing them into parity with other renewable energy producers who today receive tax credits of 2.1 cents per kwh.

Biomass power plants in 2008 supplied 38,788 megawatt hours of electricity in the United States, more than 30 percent of total non-hydro, renewable electricity production, according to the Energy Information Administration. For more information about the role that forest biomass can play in a national renewable electricity standard, click here.

Public Comment Period Open on EPA Greenhouse Gas Emissions Regulation

On September 30, the U.S. Environmental Protection Agency announced its plan ( Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule) to begin regulating greenhouse gas emissions under the Clean Air Act (P.L. 101-549). The EPA proposes to regulate greenhouse gas (GHG) emissions in new stationary sources with emissions greater than 25,000 tons of carbon dioxide equivalent (CO2e) per year. Six GHG’s will be included in the threshold: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. If implemented, the rule would require companies to start reporting emissions January 1, 2010, and all companies above the 25,000 ton CO2e threshold would have to obtain a five-year operating permit that “demonstrate[s] the use of best available control technologies and energy efficiency measures to minimize GHG emissions when facilities are constructed or significantly modified.”

The biofuels industry would be included among the covered entities. According to Ethanol Producer Magazine, 145 out of the 183 ethanol facilities in the United States emit more than 25,000 tons of CO2e per year.

The comment period for the emissions regulation proposal is open for a 60-day period through the end of November. For more information and to comment on the proposal, click here (scroll to the bottom for instructions).

Comment Period on Renewable Fuel Standard Ends, But Not the Debate

The public comment period for the U.S. Environmental Protection Agency (EPA) Draft Renewable Fuel Standard (RFS) closed on September 25 with a flurry of public debate.

The day itself was marked by a formal debate on Capitol Hill, sponsored by the German Marshall Fund (GMF), over whether biofuels cause more harm than good with respect to protecting the climate and reducing oil dependence. At the heart of the debate is the assessment of indirect land use change (ILUC) and whether and how it should be factored into the lifecycle carbon assessment of the various biofuel alternatives. Professor Bruce Dale of Michigan State University, believes the models used by EPA to assess the carbon emissions from indirect landuse change are fundamentally flawed and vastly overstate the impact of the domestic U.S. biofuels industry on landuse change overseas, whereas GMF Transatlantic Fellow Tim Searchinger argued that the carbon emissions from indirect landuse change are significant, and that rising biofuel and food demand will drive accelerated deforestation and emissions in the decades ahead.

Two days earlier, on the Senate side of the Hill, Senators Tom Harkin (D-IA), Ben Nelson (D-NE), and Chuck Grassley (R-IA) introduced an amendment to the Interior-Environment appropriations bill that would bar the EPA from using funds to implement the ILUC provisions in the RFS. This followed an earlier letter to EPA administrator Lisa Jackson from Senator Harkin and a bipartisan group of a dozen senators opposing using ILUC in assessing the lifecycle carbon emissions of biofuels. “EPA’s actions, if based on erroneous indirect land use assumptions, could hinder biofuels development and actually extend America’s reliance on dirtier fossil fuels. Agricultural practices and land use decisions in other countries are not driven by U.S. biofuels policy, and should not be used to undermine our domestic biofuels industry,” said Senator Charles Grassley (R-IA) – one of the twelve signees. Administrator Jackson responded assuring the senators that EPA would reflect their concerns by incorporating additional uncertainty analysis into EPA’s regulatory process. The amendment was dropped.

Meanwhile, across town, the Union of Concerned Scientists (UCS) released a statement, signed by more than 200 scientists and economists, calling on the EPA to fully account for carbon emissions associated with ILUC in its RFS regulations.

In a Biotechnology Industry Organization (BIO) press release, Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section, stated, “EPA’s proposed methodology yields highly uncertain estimates of biofuels affect on international land use change, due in part to starting assumptions about future crops productivity and land constraint, causality, and the role of other countries’ land use policies. EPA must acknowledge the limitations of the current state of the science of estimating international land use change and not preemptively disqualify biofuels from the program unless they are clearly demonstrated to exceed the greenhouse gas emission thresholds set in the law.”

The EPA is expected to release the final regulations by December.

GAO Issues Report on Biofuels

On October 2, the U.S. Government Accountability Office (GAO) released a report Biofuels: Potential Effects and Challenges of Required Increases in Production and Use, which found that increased biofuel use under the expanded Renewable Fuel Standard could lead to increased crop prices, impairment of water quality and availability, degradation of air and soil, and the disruption of animal habitats. The report also notes “the extent of these effects is uncertain and could be mitigated by such factors as improved crop yields, feedstock selection, use of conservation techniques, and improvements in biorefinery processing.” The GAO recommended the Environmental Protection Agency, Department of Energy, and Department of Agriculture work together to develop a strategy to assess uncertainties concerning indirect landuse change and the lifecycle greenhouse gas emissions analysis, and that Congress consider requiring the EPA to evaluate such uncertainties. It also urges Congress to eliminate or make revisions to the Volumetric Ethanol Excise Tax Credit (VEETC), which currently provides fuel blenders with a 45-cent per gallon federal tax credit.

New Bill to Explore Biochar Potential

On September 24, Senator Harry Reid (D-NV) and four cosponsors introduced the Water Efficiency via Carbon Harvesting and Restoration (WECHAR) Act of 2009 (S. 1713). The bill would establish loan guarantees to develop biochar technology using excess plant biomass and would establish biochar demonstration projects on public land.

Biochar technology could be a win-win for mitigating climate change, helping agriculture adapt to climate change, and restoring and building soil fertility. It is made by heating organic material (e.g. forestry and crop residues) to a high temperature in an oxygen-free environment. The pyrolysis process also produces gas and bio-oil which can be used to fuel the process. When used as a soil supplement, biochar increases soil fertility and moisture retention, and it stays in the soil for hundreds of years, sequestering carbon. A comprehensive evaluation of the feasibility and potential long-term effects of producing and using biochar on a large scale has not yet been undertaken. The proposed legislation would advance research and development. The bill has been referred to the Senate Energy and Natural Resources Committee.

For more information on biochar, click here.

Proposed Incentives for New Recycled Plastic Technology

On September 17, Representative Bill Pascrell (D-NJ) introduced The Plastics Recycling Act of 2009 (H.R. 3592), which would allow tax credits for the production of oil from recycled plastic wastes. Producers would receive a 60 cent tax credit for every gallon of synthetic oil made from recycled plastic. Most plastic today is made from petroleum, but increasingly plastic is being made from renewable bio-based sources. The proposed tax credit would apply to synthetic oil made from any type of plastic.

The United States Environmental Protection Agency reports that in 2007, Americans disposed of about 31 million tons of plastics in the municipal solid waste (MSW) stream. As a proportion of total MSW, plastics have increased from one percent in 1960 to more than 12 percent in 2007. Less than seven percent of plastics were recycled in 2007.

New technologies are coming on line to convert used plastics to fuel. The Washington Post reports Envion, a Washington, D.C.-based company, recently opened a pilot plant in Derwood, MD, to demonstrate one conversion process. The plant uses infrared energy to convert plastics into synthetic oil. Chairman and chief executive of Envion, Michael Han, estimates a commercial scale plant will be able to convert 10,000 tons of plastic per year into about 60,000 barrels of synthetic oil, which can then be refined into gasoline, diesel, jet fuel, or kerosene, at a cost of about $10 per barrel. Envion says the waste ash from the process is non-hazardous.

WWF Report: Biotechnology Could Help Cut CO2 Emissions Significantly By 2030

On September 17, the World Wildlife Fund (WWF) released a new report detailing the significant potential for current and emerging industrial biotechnologies to significantly reduce global greenhouse gas emissions by 2030 and beyond. The report identifies four broad areas in which cross-cutting biotechnologies could contribute to reducing greenhouse gas emissions by 1.0 to 2.5 billion metric tons per year CO2-equivalent by 2030 (more than Germany emitted in 1990):

  • Improving industrial efficiency in processes and materials across industries
  • Substituting biofuels for fossil fuels
  • Substituting bio-based products for fossil fuel-based products
  • Eliminating waste through waste reprocessing

However, industrial biotechnology will not fulfill this potential automatically. New markets, policies, standards, and technologies still need to be developed, disseminated, and deployed. “Low carbon biotech solutions are a good example of hidden or invisible climate solutions that are all around us already today but are easy to overlook for policymakers, investors and companies,” says John Kornerup Bang, Head of Globalization Program at WWF Denmark and coauthor of the report.

Can Bioenergy Production Be Wildlife-Friendly?

With a U.S. government mandate to produce 36 billion gallons of biofuel by 2022, the agricultural and biotech sectors are rapidly trying to advance toward the set goal. But can this be done in ways that advance the interests of wildlife, as well?

In the October 2009 edition of BioScience, an article entitled “Bioenergy and Wildlife: Threats and Opportunities for Grassland Conservation” examines the harmful impacts of bioenergy production on habitats and proposes alternative approaches to managing grasslands for both habitat and bioenergy production. The authors examine two methods that aim to ensure that bioenergy sources are compatible with wildlife: utilization of biomass sources that do not require any additional land directly or indirectly, and production of biomass with wildlife-friendly feedstocks and land-use practices. Diverse native prairie species may offer the best alternative for meeting both biomass energy and wildlife needs.

How Will Biofuels Production Affect "Dead Zones" in Gulf of Mexico and Elsewhere?

Nutrient run-off from agriculture contributes significantly to the formation of extensive, oxygen-depleted, “dead zones" in the Gulf of Mexico, the Chesapeake Bay, and in water bodies elsewhere across the country. Efforts have been underway for some time to restore aquatic ecosystems, but relatively little progress has been made to date. How can these efforts be improved, and how will the increasing production of biofuels from corn, soy, and cellulosic feedstocks, as mandated by the Renewable Fuel Standard, affect these restoration efforts? Questions such as these have inspired a recent congressional hearing, new legislation, and recent research.

On September 17, the House Committee on Science and Technology Subcommittee on Energy and Environment held a hearing to discuss draft legislation The Harmful Algal Blooms and Hypoxia Research and Control Amendments Act of 2009. In his opening statement, Subcommittee Chairman Brian Baird (D-WA) observed, “Harmful algal blooms pose serious threats because of their production of toxins and reduction of oxygen in the water. These impacts include alteration of the ocean’s food web, human illnesses, and economic losses to communities and commercial fisheries.” The bill would “develop and coordinate a comprehensive and integrated strategy to address harmful algal blooms and hypoxia, and to provide for the development and implementation of comprehensive regional action plans to reduce harmful algal blooms and hypoxia.” Rep. Baird and ten cosponsors subsequently introduced H.R. 3650 on Sept. 25. Similar legislation (S. 952) has been introduced in the Senate by Senator Olympia Snowe (R-ME).

According to the Centers for Disease Control and Prevention, scientists still do not know the full affect of harmful algal blooms on human health, but it is known that cyanobacteria, harmful marine algae associated with red tide, and Pfiesteria piscicida can cause rashes, gastrointestinal illnesses, confusion, allergic reactions, and death in some cases.

One of the major known causes of harmful algal blooms and hypoxia is nutrient runoff from agricultural production. A recent study, “Impact of Biofuel Crop Production on the Formation of Hypoxia in the Gulf of Mexico,” published in the Environmental Science and Technology Journal, examines the potential impact of nitrate pollution under different biofuel production scenarios through 2022, consistent with meeting the biofuel production levels mandated in the Renewable Fuel Standard.

At present, nutrient run-off from agriculture (primarily from corn and soy production) is responsible for about half of the excess nutrient load in the northern Gulf of Mexico. The study found that by shifting from corn-based ethanol production to using increasing amounts of cellulosic feedstocks (e.g. corn stover and switchgrass), nitrate output from the Mississippi watershed, which feeds into the northern Gulf of Mexico, could be reduced by as much as 20 percent by 2022, if best management practices are consistently applied. However, this would fall far short of what would be needed to reduce the size of the hypoxia zone from the current five-year annual average of 14,600 km2 down to EPA’s goal of 5,000 km2. A much more aggressive nutrient management approach will be needed in order to reach this goal. The authors conclude: “[O]nly when all of the nitrogen runoff associated with the production of corn, soy, and switchgrass is reduced will the EPA goal be met.”

Report Details Future Challenges Meeting Food and Biofuel Needs

In the decades ahead, farmers, ranchers, and foresters around the world will be challenged to produce enough food, feed, fiber, and fuel to meet the needs of a rapidly growing population and rising standards of living. That alone is a tall challenge. They will also need to accomplish this in a way that is ecologically sustainable, and they will have to succeed in the face of new diseases and pests, increasing extreme weather variability, and a shrinking global land base due to the changing climate.

On September 23, the United Nations Food and Agriculture Organization (FAO) released a report entitled “Climate Change and Bioenergy Challenges for Food and Agriculture.” FAO predicts that the world population will increase by 2.3 billion people by the year 2050. Food production will need to increase by 70 percent to meet the needs of this growing population. This will put unprecedented strains on the agricultural sector at a time when many countries are also increasing production of biofuels. The report explores the pros and cons of increased biofuel production and its effects on food security. Acknowledging that biofuels can promote energy security, help reduce greenhouse gas emissions, and support farmers by increasing the prices of crops, the report also notes that the higher prices will have significant negative effects on food accessibility for consumers.

Food Security at Risk as Global Climate Changes

In the decades ahead, as the global climate changes, farmers, ranchers, and foresters will need to manage limited land resources ever more wisely to increase production of vital food, fiber, fuel, ecosystem functions, and wildlife habitats. Case in point: on October 1, the International Food Policy Research Institute (IFPRI) released a report entitled Climate Change, Agriculture, and Food Security: Impacts and Costs of Adaptation to 2050, which warns of increasing worldwide hunger. The report notes that climate change will have an exceedingly negative impact on the agricultural sector and human well-being - especially on the world’s destitute population - due to a decline in crop yields and increased food prices. Per capita calorie consumption and child malnutrition numbers were used as the key indicators of human well-being. According to the report, child malnutrition will increase by 20 percent by the year 2050 and will require a $7 billion increase per year in public spending in order to mitigate this effect. The report makes eight recommendations, including designing better overall development policies and programs, increasing investments in agricultural productivity, and making agricultural adaptation a key agenda point within the international climate negotiation process.

Comments Invited on Draft Standard for Sustainable Biomass Production

On September 11, the Council on Sustainable Biomass Production (CSBP), a multi-stakeholder organization established in 2007 to develop comprehensive, voluntary sustainability standards for the production of biomass and its conversion to bioenergy, opened a public comment period on its Draft Standard. CSBP intends for its standard to serve as the foundation for sustainable production and a certification program, which will set the emerging bioenergy industry on a course of continuous improvement with support from growers, all sectors of the industry, including refineries, and social and environmental interests.

The CSBP standard will apply to biomass produced from non-food sources, such as dedicated fuel crops, crop residues, purpose-grown wood, forestry residues, and native vegetation. The standard addresses the full complement of sustainability issues, including climate change, biological diversity, water quality and quantity, soil quality, and socio-economic well-being.

The Council invites comments on the Draft Standard from all stakeholders by November 9, 2009. Instructions for submitting comments, can be found at www.csbp.org.

Vilsack Announces Funding for Rural Energy for America Program

In a series of announcements since August, U.S. Department of Agriculture Secretary Tom Vilsack has released more than $90 million in funding for energy efficiency and renewable energy projects through the Rural Energy for America Program (REAP) – a provision of the 2008 Farm Bill (P.L. 110-234). On August 10, he announced $15 million in grants and loans for 365 projects. On September 2, Secretary Vilsack announced $13 million in loans and grants for 233 renewable energy projects in 38 states. On September 24, he announced a third round of REAP funding that will provide $62.5 million in loans and grants for 705 projects in 45 states and Puerto Rico. Secretary Vilsack stated that he is pleased with the REAP progress, but also noted "While the REAP grants will continue to provide an important jump start to a clean, renewable energy future, Congress must act to pass comprehensive energy and climate legislation to create the green jobs our economy needs and get our nation on the path to being truly energy independent."

Pipeline Approved To Deliver Petroleum from Alberta Oil Sands to U.S.

While the U.S. Environmental Protection Agency (EPA) continues to consider (and inspire much public debate) whether the life-cycle greenhouse gas intensity of renewable corn-based and cellulosic biofuels meet the low-carbon requirements of the Renewable Fuel Standard, the State Department has given the go-ahead to build a pipeline across the U.S.-Canadian border to import much higher carbon petroleum from Canada. On August 20, the U.S. State Department approved the Alberta Clipper Project, an oil pipeline that would deliver petroleum from Alberta, Canada, to refineries in the upper U.S. Midwest. This followed a two-year period of environmental review and public comment.

Canada is the United States' top foreign oil supplier. According to the U.S. Energy Information Agency, 95 percent of Canada’s proven oil reserves are in the form of oil sands. In 2008, the U.S. imported about one million barrels of oil per day from Canada.

Producing oil from tar sands requires a lot more energy and water than producing conventional oil. The oil sands must be strip-mined, transported, and heated to separate the oil from the rock. The process destroys vast tracts of boreal forest and habitat, disrupts migratory paths, and fowls watersheds and airsheds. On September 14, Greenpeace released a report entitled “Dirty Oil: How Tar Sands Are Fueling the Global Climate Crisis.” The report is highly critical of the high carbon-intensity and other harmful environmental impacts of increasing petroleum production from oil sands at a time when the U.S. and Canada should be reducing their carbon footprints, climate impacts, and oil dependence.

Writers: Ned Stowe and Sarah Jones

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