Elusive cornucopia: why it will be hard to reap the benefit of biofuel
James Mackintosh, Financial Times
Not long ago, politicians encountered ethanol only when sipping a dry martini. But now a combination of soaring petrol prices, fears over a reliance on Middle East oil and concern about global warming has led governments in Europe, America and Asia to promote alcohol as a fuel for cars.
Wall Street is drunk on ethanol, pouring cash into constructing refineries and searching for any company that can claim a link to "green" fuels.
...But strip away the hoopla and it becomes clear that the benefits of this investment, both for the environment and for energy security, are being wildly overstated - because money is being poured into technologies likely to be outdated within a decade. Moreover, a big switch to biofuel with today's technology would serve only to replace US and European dependence on foreign oil with a dependence either on foreign biofuels or foreign food. Neither is likely to gladden the hearts of national security hawks.
...So how sound is the rationale for all this activity? Ethanol and biodiesel can certainly help reduce greenhouse gases from road transport, which produces about one-quarter of global emissions. As plants grow, they absorb carbon dioxide, the main greenhouse gas, which is then emitted again when the fuel is burnt in an engine.
But what is rarely highlighted is just how small the savings are in the US and Europe from using the current technology - and how much land is needed. It is difficult and expensive to convert food crops such as corn, wheat, sunflower, sugar beet or rapeseed grown in Europe or the US into fuel and requires intensive energy.
As a result, according to a study by Alexander Farrell of the University of California, Berkeley, published in Science magazine, today's ethanol production processes cut overall greenhouse gas emissions by only about 13 per cent compared with petrol. In Brussels the Commission has found that the standard production methods for sugar-beet ethanol in Europe reduced global warming emissions by a "modest" one-third compared with petrol.
The Commission's study concludes that home-grown biofuels are an expensive way to cut emissions: "More greenhouse gas could be saved for the same money in other sectors," it says.
...Mr Hwang - who, like many environmentalists, spent a decade fighting attempts to boost ethanol use before becoming a supporter - argues that first-generation biofuels need support in order to have a market ready for when better fuels arrive.
(21 June 2006)
Long in-depth article. The original at Financial Times is behind a paywall. The entire article is posted here.
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