Biofuels

According to Exxon-Mobil , 9 % of the world ’ s energy came from biofuels in 2017 .
They do not expect this percentage to increase by 2040 , and it may go down .
For the most part it is a developing world fuel .
Primary biofuels include dung , wood , wood chips and pellets .
Secondary , or manufactured biofuels include ethanol and biodiesel , which derive from several agricultural products , mainly corn , sugar cane , palm oil , soybeans and canola .
The main advantage of using locally sourced wood and dung are their @ @ @ @ @ @ @ imported wood or wood chips for generating electricity , as is done in Europe , is more problematic .
Due to the economic and environmental costs of farming the trees , making the wood pellets or chips and shipping them to the powerplants ; wood is not a competitive fuel for most powerplants .
The energy density is too low .
However , if the source of the wood is within fifty miles of the plant , it can be competitive with coal and it may produce fewer greenhouse gases than coal , @ @ @ @ @ @ @ also more expensive than fossil fuels and must be subsidized to be competitive .
Worldwide , biofuels ( meaning biomass + transportation biofuels + waste ) are the largest renewable energy source .
In 2017 , bioenergy accounted for 60 to 70 % of renewable energy consumption .
In the same year , biofuels supplied about three percent of the energy used in transportation , this was mainly biodiesel and ethanol .
Worldwide , about 95 % of the renewable energy used for heating and cooking in the home , on farms , @ @ @ @ @ @ @ was from burning dung or wood .
This causes considerable indoor air pollution and the World Health Organization ( WHO ) estimates some four million people die every year as a result .
In 2017 , 86 % of the biomass , burned for energy , was used for cooking or heating homes , most of the remainder was ethanol or biodiesel .
Ethanol , biodiesel and wood as fuel : The economics Biofuels have a low to very low energy density , relative to fossil fuels or nuclear fuel , and you @ @ @ @ @ @ @ energy .
Biofuels , with the exception of some biodiesel products , also cause a lot of pollution , this includes the pollution created when growing the product , such as wood , palm trees , soybeans , canola or corn ; the pollution created when ethanol or biodiesel are manufactured ; and when the product is burned .
An external cost of biofuels is that using them can raise the cost of food , this is particularly true of corn ethanol .
Another external cost is that producing , and manufacturing biofuels @ @ @ @ @ @ @ availability is a problem in many parts of the world .
Ethanol is corrosive , it contains oxygen , it attracts water , and can cause steel to crack .
This means that it can not be put in normal pipelines and often must be trucked .
This increases costs and lowers the biofuel ’ s EROI ( energy returned on investment ) .
EROI is a ratio , the numerator is the energy produced by the final product and the denominator is the total energy used to produce it .
The denominator @ @ @ @ @ @ @ a proxy for the energy input .
Because costs are used , computed EROI ’ s for any fuel can vary a lot between countries .
This is due , mainly , to differences in labor and land costs .
Thus , for a given fuel product , a developed country will have a lower computed EROI , due to a larger denominator , than an undeveloped country , where living standards , wages , and land have lower costs .
As we will see , this affects the economic breakeven EROI .
@ @ @ @ @ @ @ living , a higher EROI is required to maintain their high standard of living .
In order to maintain a high standard of living , each person must use more energy .
In concentrations above 20 % by volume , ethanol , in either gasoline or diesel , can destroy engines that are not specially modified for the fuel .
This is also true of some forms of biodiesel .
This is such a hazard that car and truck manufacturers will not honor warranties for most vehicles if the owner purchases gasoline or @ @ @ @ @ @ @ .
Some claim that burning wood to produce electricity produces “ good ” CO because the trees cut down for fuel will be replaced by trees that will absorb the CO .
This may or may not be true , but either way the cost of cutting down trees , planting new ones , preparing and transporting the wood to a power plant can be so high , as to prohibit its use in the absence of subsidies and mandates .
The EU is the world ’ s largest wood pellet market , @ @ @ @ @ @ @ EU , Italy and Germany are the largest consumers .
The EROI of a fuel , especially a transportation fuel , must exceed three for it to be useful and some researchers set the economic limit even higher .
The EROI of burning wood for electricity is very low , around 10 ( Nationale Akademie der Wissenschaften – Leopoldina 2012 , p. 10 ) .
It is much lower than the EROI of burning coal ( 45 to 80 ) , even with a full set of pollution scrubbers on the coal-burning power @ @ @ @ @ @ @ lignite , such as that used in Germany , the EROI can be as low as 30 .
The EROI of corn-based ethanol , for comparison purposes , is between 1.25 and 3.5 .
Some argue that the energy put into corn farming and ethanol production exceeds the energy yield from the fuel ( Patzek 2014 ) .
Or , put another way , “ The fossil energy inputs required for farming and processing often cancel out most of the energy delivered ” ( Nationale Akademie der Wissenschaften – Leopoldina 2012 , p. @ @ @ @ @ @ @ to the industrial corn-ethanol industry were $ 3.3 billion in 2004 .
The increase in biofuel production really took off in 2005 and this was one of the causes of an increase in food prices that began that year , see ( Tyner 2008 ) .
When ethanol production flattened out in 2012 due to the ethanol 10 % “ blend wall ” ( see below for details ) then food prices stopped rising .
The reason many want to use biofuels is that they hope using them will reduce greenhouse emissions .
@ @ @ @ @ @ @ is not the case .
In August 2012 the German National Academy of Sciences found that removing biomass from the area where it was grown and using it for fuel is : This is apparent because removing the biomass also removes nutrients needed to grow the plants , they must be replaced using manufactured fertilizer .
The carbon cycle can not be separated from the nutrient cycle without cost ( Nationale Akademie der Wissenschaften – Leopoldina 2012 , p. 6 ) .
Pesticides are also needed to increase yield , farming requires a @ @ @ @ @ @ @ the land used for the biomass farm is land that could be forest or grassland that would sequester carbon or a farm producing food , reducing food costs .
The loss of arable land has a cost , it increases the cost of food or it emits greenhouse gases .
ExxonMobil and Synthetic Genomics , Inc. have developed a strain of algae that is able to convert carbon into an energy-rich fat that can be processed into biodiesel ( Ajjawi , et al .
2017 ) .
Making biofuels from algae is not @ @ @ @ @ @ @ of algae is more than twice as energy rich ( twice the fat content ) as other types of algae .
A significant advantage of this algae is that growing it does not require farmland and it has little to no effect on our food supply .
This is a promising technology , but still in the research stage and the economic viability of this renewable option is not known .
The U.S. Department of Energy ( DOE ) spent millions of dollars making biofuels from algae between 1978 and 1996 before shutting @ @ @ @ @ @ @ ( Kiefer 2013 , p. 3 ) .
The problems identified by the DOE were mainly economic .
The main difference with the Exxon-Mobil project is in the algae used .
Ethanol from corn and cellulose and the ethanol mandate The U.S. government Renewable Fuel Standard ( RFS ) mandates that the crude oil refining industry buy a specific amount of ethanol each year and pay heavy fines if they don ’ t .
They are ordered to buy a product they do not want and punished if they don ’ t buy @ @ @ @ @ @ @ this is a subsidy to the fossil fuel industry .
The EPA administers the program and has the authority to waive the statutory ethanol targets .
This has had the effect of making the rule unpredictable and arbitrary .
Further , the mandate to use more cellulosic ethanol , ethanol from grass and other non-standard crops , has never worked .
The manufacturing process has technical and economic hurdles that are overwhelming .
So , the mandate to use cellulosic ethanol , a supposedly “ advanced ” biofuel has been waived every year @ @ @ @ @ @ @ companies are still looking for an economic method to convert cellulose to biodiesel , but no viable solutions have been found .
It is worth considering that the first cellulosic ethanol plant opened in the United States in 1910 and it failed .
So , despite 110 years of trying , cellulosic ethanol and biodiesel are still not economically viable ( Kiefer 2013 , p. 3 ) .
Mandating the use of a technology that has not been invented yet is foolish , but we are talking about the government , they know @ @ @ @ @ @ @ year the EPA dictates the required overall volumes of various transportation biofuels for the following year .
Then it projects the amount of fuel consumption expected for the period and dictates the amount of ethanol that the refining industry must purchase , regardless of how much they can use .
Each gallon of ethanol produced or imported is assigned a unique renewable identification number , a “ RIN.
” These RIN ’ s are tradable and can be bought by refineries to offset ethanol they are ordered to purchase but can not use @ @ @ @ @ @ @ they are ordered to use can sell RINs .
Another way to obtain RINs is to purchase expensive “ advanced ” biofuels or biodiesel from overseas so they over-comply with the “ advanced biofuel ” part of the RFS to gain RINs .
See a recent post by Paul Driessen here .
A problem is created because the ethanol producers want the government to force the refiners to take more ethanol , but the refiners face a “ blend wall.
” With today ’ s engines , the maximum ethanol content in gasoline @ @ @ @ @ @ @ and engine damage can result .
To make matters worse , sales of heavily subsidized electric vehicles and hybrids and cars with better gasoline mileage are reducing the total demand for gasoline .
The mandate is for volumes of ethanol , irrespective of the volume of gasoline sold .
Many refiners put as much ethanol as they can into their gasoline , but will still fall short of the government mandates , so they are forced to buy RINs from others , especially biodiesel manufacturers , often these manufacturers are overseas companies .
@ @ @ @ @ @ @ , meaning that biodiesel and the specialty 85 % ethanol fuel are heavily subsidized simply because they generate valuable RINs .
The compliance burden falls most heavily on large refiners , because small refineries are routinely granted exemptions from the RFS requirements .
In August of 2019 , 31 small refiners were granted exemptions from the RFS .
The angry corn-ethanol producers then furiously complain and demand that the EPA allow the sale of higher-percentage ethanol blends , raise the RFS and stop granting exemptions .
This causes the automobile manufacturers to refuse @ @ @ @ @ @ @ that puts more than 10 % ethanol gasoline in their cars .
If refiners are forced to pay any more for their RINs , they claim they will go bankrupt .
It is a perfect whirlwind of lobbyists , lawyers and government bureaucrats , who are the only ones who make any money out of this mess .
This is a perfect candidate for deregulation , but instead President Trump ordered the EPA to move towards E15 ( gasoline with 15 % ethanol ) and has suggested fixes for the RIN market , @ @ @ @ @ @ @ farm lobbies .
Recently , Reuters reported that the Trump administration has decided to drastically scale back the EPA ’ s program to exempt small oil refineries from the country ’ s biofuel regulations .
The Trump administration has more than quadrupled the number of exemptions since 2015 , protecting a large number of small refineries .
However , the 10th Circuit Court of Appeals has ruled that the EPA exceeded its authority since many of the new exemptions are for refineries that had not received the exemption before , it ruled that @ @ @ @ @ @ @ previously received one .
As of March 4 , 2020 , the EPA has not said what it will do , but acknowledged that they needed to “ quell ” the market for RINs .
The market for gasoline and diesel has shrunk , but the ethanol mandates have not .
The National Academies of Sciences says that biofuels can only be competitive , without subsidies and mandates , if gasoline costs over five dollars a gallon or when crude oil reaches $ 191 per barrel .
These are prices we are very @ @ @ @ @ @ @ .
As explained above , energy used to make a fuel , like a biofuel , must be much less than the energy output for the fuel to be useful .
An EROI of one means just as much energy was used to make the fuel as we can get out of it , but this isn ’ t good enough .
We are inefficient in the way we use fuel , for example cars with conventional gasoline engines are only about 30 % efficient and natural gas combined-cycle electric power plants are @ @ @ @ @ @ @ EROI of one is not good enough .
The best solar panels convert 15 % to 22 % of the sun ’ s energy into electricity and must contend with cloudy days and nighttime .
Windmills are only 38 % efficient on average and only extract 50 % of the energy that flows through the rotor area .
Solar and windmill overall efficiency varies with location , but in Germany , on average , solar efficiency is 8 % of rated capacity and wind is 17 % of rated capacity .
Estimates vary @ @ @ @ @ @ @ corn-based ethanol has an EROI of only 1.25 ( Kiefer , 2013 ) .
Other estimates are as high as 3.5 ( Weissbach , et al .
2018 ) .
When we consider the loss of energy when using ethanol in a vehicle , this is a negative return .
Cars and trucks are not perfectly efficient , so breakeven has been estimated to be around three by Hall , et al .
( 2009 ) .
According to Kiefer , even ancient Rome did better with grain for slaves , oxen and @ @ @ @ @ @ @ 4.2 .
In building the colosseum the EROI was 1.8 .
Weissbach , et al .
( Weissbach , et al .
2018 , p. 7-8 ) place the EROI economic threshold much higher , at about 10:1 to maintain our modern standard of living , which may be more realistic .
Weissbach also explains the difference between fossil fuels and wind and solar , which require “ buffering ” ( Weissbach , et al .
2018 , p. 8 ) to smooth out their fluctuations in output .
Weissbach explains that the @ @ @ @ @ @ @ country used to do the computation affect the calculation , as we mentioned above .
For example , a natural gas turbine in a less developed country will have a higher EROI than one in an industrialized country , this is due to the lower cost of labor in the less developed country .
Money is a good proxy for the input energy in a power plant but using costs as input changes the computed EROI for any given power source according to the location .
Coal-fired steam engines came along in the @ @ @ @ @ @ @ more .
In the early coal mining days extracting coal was very easy since it was accessible at the surface or very near the surface .
This was a good thing because early steam engines were very inefficient .
However , as coal-fired steam engines proliferated they replaced slave labor , so the social and economic benefits were large .
Our civilization depends very much on EROI as the surplus energy ( energy not used in obtaining and using fuels ) helps define our affluence .
Because we currently enjoy a large energy @ @ @ @ @ @ @ doing other things than simply growing food and gathering wood for shelter or to cook the food .
It is well documented that wealth and standard of living are closely related to energy consumption ( see Figure 1 ) .
Obviously , energy consumption is related to price , the cheaper the energy the more we consume and the better off we are .
Timothy Garrett ( 2011 ) has shown that every additional 9.7 milliwatts consumed increases our global wealth by one 1990 U.S. dollar .
Other documentation of the intimate relationship @ @ @ @ @ @ @ seen here and here .
The quickest way to raise people out of poverty is to supply them with cheaper energy and the quickest way to throw more into poverty is to raise the price of energy .
The U.S. devotes 38 million acres of land to corn raised to make ethanol , this is about half of the land used in the U.S. to grow grains and vegetables .
The price of corn went from $ 87 per metric ton in 2006 to $ 217 per metric ton in 2008 , an @ @ @ @ @ @ @ jump in price was an unintended consequence of the ethanol subsidies and higher oil and gas prices ( Tyner 2008 ) .
The diversion of arable land for ethanol production raises the price of all foods and because the U.S. is a major exporter of food , it raises prices all over the world .
It is estimated that the cost of rice and flour increased 50 % after the RFS was created .
The RFS is a hidden food tax that is highly regressive and affects poor people much more than the @ @ @ @ @ @ @ logic behind the RFS is that corn ethanol is supposed to reduce carbon dioxide emissions by 20 % over the gasoline replaced .
However , this depends upon the way the corn was grown and converted into ethanol .
Some studies suggest that the 20 % reduction is more than offset by emissions on the farm and in the distillery .
Further , the farm and distillery emit ozone , particulate matter and sulfur dioxide .
The farms also use a lot of nitrogen-based fertilizers , which produce nitrogen oxides that pollute the @ @ @ @ @ @ @ causing water pollution .
The nitrogen-based fertilizers used today come from the Haber-Bosch process that uses natural gas ( methane ) , water and nitrogen from the atmosphere to produce ammonia , which is then used to make fertilizer , see Figure 2 .
Roughly three to five percent of the natural gas used in the world each day is used to make fertilizer .
Natural gas is not required to make the fertilizer , but all other sources of hydrogen are too expensive to be practical .
Both Fritz Haber and Carl @ @ @ @ @ @ @ developing the manufacturing process .
Today ’ s corn plants are bred and genetically engineered to optimize their use of this ammonia-based fertilizer .
This has allowed farmers to raise the pre-Haber-Bosch corn yield from about 32 bushels per acre in 1906 to 170 bushels of corn per acre today ( Kiefer 2013 , p. 8 ) .
The extensive production of corn-ethanol would not be possible except for the large amount of natural gas used to make fertilizer .
If we were to choose not to produce natural gas by way of @ @ @ @ @ @ @ yields would plummet to pre-World War II levels and corn-ethanol production would grind to a halt .
Other processes for making ammonia from air are being investigated and some show promise , such as the new SWAP process .
But none are working at a commercial scale yet .
One of the problems with SWAP is that it requires a lot of samarium , which is very expensive , about $ 360 per 100 grams .
The irony of pushing to replace fossil fuels with corn-ethanol , is obvious .
Fossil fuels are @ @ @ @ @ @ @ the corn used to make ethanol .
Manufacturing ethanol requires natural gas , then special plumbing and pipelines are required to transport it .
If more than 10 % ethanol is blended into gasoline or diesel , special engines are required to burn it .
Except to lobbyists and lawyers , it makes no sense .
Corn-based ethanol has its problems , but the soybean oil , canola oil and palm oil used as biofuels ( biodiesel ) in Europe and the U.S.A. are probably worse .
The European Union and the U.S.A. @ @ @ @ @ @ @ has raised the price of palm and soybean oil .
While subsidizing biodiesel through renewable energy policies , the EU also criticizes and punishes other countries , including the U.S. for subsidizing the same goods .
The high demand for palm-oil biodiesel has caused Indonesia , Malaysia and other producing countries to cut down their forests and grow huge crops to sell to European refineries .
The schizophrenic combination of both subsidies and tariffs on biodiesel reveal how nonsensical the whole concept is .
When U.S. biodiesel subsidies were withdrawn in 2016 , @ @ @ @ @ @ @ industry would probably disappear without subsidies .
Western economies require a high EROI and both Weissbach and Kiefer believe that biodiesel and other biofuels are subeconomic there .
The U.S. biodiesel subsidies were reinstated and made retroactive in 2019 .
Canola ( rapeseed ) is grown in Europe , Canada and other countries and used to make biodiesel in many locations .
In the U.S. soybean oil is preferred as a feedstock for biodiesel , but canola oil and recycled cooking oils are also commonly used .
In the U.S. biodiesel is commonly @ @ @ @ @ @ @ from 5 % to 20 % biodiesel .
Palm-oil biodiesel ( blended 20 % to 50 % with petroleum diesel ) results in lower emissions of carbon monoxide , particulates ( smoke ) and hydrocarbons than regular diesel , but if that palm-oil came from a cleared tropical rainforest , according to the EU , then palm-oil biodiesel is not sustainable and should not qualify under the EU RFS .
Of all the feedstock crops for biodiesel , palm oil has the best characteristics as a fuel , second only to petroleum diesel @ @ @ @ @ @ @ damage engines .
All vegetable oil-based biodiesel products deteriorate with time ( biodegrade ) but palm-oil seems to be the most stable .
Even though Sir Rudolf Diesel ran his conventional diesel engines using vegetable oil without any modification , today this isn ’ t practical .
Vegetable oils , including palm-oil , have a large molecular mass , low volatility and high viscosity , this reduces the performance of the engine and , in low temperatures , causes the fuel to become an unpumpable gel .
In addition , they have a @ @ @ @ @ @ @ problems , the vegetable biodiesel is typically blended with petroleum diesel or alcohol and a surfactant at elevated temperatures .
Other processes to prepare biodiesel for modern diesel engines are complex chemical processes , including pyrolysis and transesterification .
These processes create a product that can damage engines ( Nationale Akademie der Wissenschaften – Leopoldina 2012 , p. 47 ) and the processes create a lot of wastewater that requires expensive processing before it can be discharged ( Zahan and Kano 2018 , p. 2 ) .
In the production of biodiesel , @ @ @ @ @ @ @ and this is only 20-50 % of the plant dry mass , thus the energy yield per square meter of farmland is lower than for ethanol and much lower than for biogas .
Just as serious is the potential damage to very expensive diesel engines , the risks are high enough that the manufacturers of newer , highly efficient engines have refused to sanction the use of biodiesel in their vehicles .
The risks to engines include dilution of motor oil , coking of piston rings , corrosion of hydraulic components ( including @ @ @ @ @ @ @ and fouled injectors .
These problems arise from poor production practices and fuel aging , since the fuel deteriorates with age ( Nationale Akademie der Wissenschaften – Leopoldina 2012 , p. 47 ) .
While biodiesel can lower the emissions of CO and particulate matter , it increases fuel consumption per mile , reduces engine power , and increases NOx ( nitrogen oxides , a family of pollutants ) emissions .
The main cost of making biodiesel is the cost of the feedstock , because vegetable oil is expensive .
In the U.S. @ @ @ @ @ @ @ than petroleum diesel in 2017 , even with subsidies ( Zahan and Kano 2018 ) .
Biofuels are not economically viable at today ’ s oil and natural gas prices .
Their EROI will not sustain the quality-of-life a developed nation is used to today .
In other words , to adopt biofuels , the western world must either heavily subsidize them , imposing a hidden tax on their citizens in order to support farmers and biofuels manufacturers , or they must accept a much lower quality-of-life , aka “ Human Development Index @ @ @ @ @ @ @ .
Even if petroleum oil and gas prices were to rise to a level where biofuels could compete on a level playing field , with today ’ s technology , the biofuel EROI shows us that our standard of living would have to go down substantially .
There is no reason to prop up biofuels for some uncertain future , their EROI alone shows us we could not use them under any circumstances .
If pressed by high fossil fuel prices , we would choose a fuel with a higher EROI , like @ @ @ @ @ @ @ to maintain our quality-of-life and standard-of-living .
People hate to go backwards , which is what biofuels would demand .
How did we get here ?
The original ethanol subsidy was part of the 1978 Energy Policy Act ( Tyner 2008 ) .
It was originally 40 cents per gallon , it has varied from 40 to 60 cents per gallon ever since and is currently 45 cents .
This is on top of state and local subsidies that can raise the total to $ 1.38 per gallon .
The subsidy program was @ @ @ @ @ @ @ 2004 .
Both , the original subsidy and Bush ’ s Volumetric Ethanol Excise Tax were meant to help America achieve energy independence .
However , the U.S. is already energy independent due to shale gas and oil , invalidating the original reason for the subsidies .
After the U.S. was well on its way to energy independence , U.S .
Senator Tom Coburn led an effort to repeal the ethanol subsidy in 2011 , but the repeal was fought vigorously by Iowa Senators Chuck Grassley and Joni Ernst , it failed to @ @ @ @ @ @ @ corn and ethanol lobbies are very powerful .
The Energy Policy Act of 2005 mandated a one dollar a gallon subsidy for new agricultural biodiesel and 50 cents to used feedstocks like fryer grease .
This tax credit expired in 2016 and ten biodiesel manufacturers shut down , then it was retroactively extended late in 2019 .
Some articles claim this subsidy and the ethanol subsidy benefit the oil and gas industry , which is nonsense , it hurts both them and the consumer .
This is why small petroleum refineries are granted @ @ @ @ @ @ @ shut down .
The small refineries are even granted waivers if they are owned by Exxon-Mobil , and for good reason , we want them to stay open .
The subsidies benefit farmers and ethanol and biodiesel refineries , which are not part of the oil and gas industry .
Just more fake news about oil and gas subsidies , similar to the false claim that the Low Income Energy Assistance ( LIHEAP ) welfare program is an oil and gas subsidy .
So , we see how a government program , created @ @ @ @ @ @ @ 1978 , becomes a permanent corporate welfare program for farmers and biofuel refiners .
It has created a constituency that is totally dependent upon government handouts .
Like all such programs , the taxpayers and consumers are the victims .
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2017 .
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Twenty-First Century Snake Oil : Why the United States Should Reject Biofuels as Part of a Rational National Security Energy Strategy .
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Tyner , Wallace E. 2008 .
“ The US Ethanol and Biofuels Boom : Its Origins , Current Status , and Future Prospects.
” Bioscience 58 ( 7 ) .
doi : https : //doi.org/10.1641/B580718 .
Weissbach , D. , F. Hermann , G. Ruprecht , and A.
@ @ @ @ @ @ @ , EROI ( energy returned on invested ) , for electric sources.
” EPJ Web of Conterences .
https : //www.epj-conferences.org/articles/epjconf/pdf/2018/24/epjconf_eps-sif2018_00016.pdf .
Zahan , Khairul , and Manabu Kano .
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By Andy May
According to Exxon-Mobil, 9% of the world’s energy came from biofuels in 2017. They do not expect this percentage to increase by 2040, and it may go down. For the most part it is a developing world fuel. Primary biofuels include dung, wood, wood chips and pellets. Secondary, or manufactured biofuels include ethanol and biodiesel, which derive from several agricultural products, mainly corn, sugar cane, palm oil, soybeans and canola. The main advantage of using locally sourced wood and dung are their low cost and wide availability. Using imported wood or wood chips for generating electricity, as is done in Europe, is more problematic. Due to the economic and environmental costs of farming the trees, making the wood pellets or chips and shipping them to the powerplants; wood is not a competitive fuel for most powerplants. The energy density is too low. However, if the source of the wood is within fifty miles of the plant, it can be competitive with coal and it may produce fewer greenhouse gases than coal, estimates vary. Ethanol and biodiesel are also more expensive than fossil fuels and must be subsidized to be competitive.
Worldwide, biofuels (meaning biomass + transportation biofuels + waste) are the largest renewable energy source. In 2017, bioenergy accounted for 60 to 70% of renewable energy consumption. In the same year, biofuels supplied about three percent of the energy used in transportation, this was mainly biodiesel and ethanol. Worldwide, about 95% of the renewable energy used for heating and cooking in the home, on farms, in restaurants and by street vendors, was from burning dung or wood. This causes considerable indoor air pollution and the World Health Organization (WHO) estimates some four million people die every year as a result. In 2017, 86% of the biomass, burned for energy, was used for cooking or heating homes, most of the remainder was ethanol or biodiesel.
Ethanol, biodiesel and wood as fuel: The economics
Biofuels have a low to very low energy density, relative to fossil fuels or nuclear fuel, and you need lot of biomass to produce much energy. Biofuels, with the exception of some biodiesel products, also cause a lot of pollution, this includes the pollution created when growing the product, such as wood, palm trees, soybeans, canola or corn; the pollution created when ethanol or biodiesel are manufactured; and when the product is burned. An external cost of biofuels is that using them can raise the cost of food, this is particularly true of corn ethanol. Another external cost is that producing, and manufacturing biofuels uses a lot of water and water availability is a problem in many parts of the world.
Ethanol is corrosive, it contains oxygen, it attracts water, and can cause steel to crack. This means that it cannot be put in normal pipelines and often must be trucked. This increases costs and lowers the biofuel’s EROI (energy returned on investment).
EROI is a ratio, the numerator is the energy produced by the final product and the denominator is the total energy used to produce it. The denominator is usually computed using cost data as a proxy for the energy input. Because costs are used, computed EROI’s for any fuel can vary a lot between countries. This is due, mainly, to differences in labor and land costs. Thus, for a given fuel product, a developed country will have a lower computed EROI, due to a larger denominator, than an undeveloped country, where living standards, wages, and land have lower costs. As we will see, this affects the economic breakeven EROI. In countries with a high standard of living, a higher EROI is required to maintain their high standard of living. In order to maintain a high standard of living, each person must use more energy.
In concentrations above 20% by volume, ethanol, in either gasoline or diesel, can destroy engines that are not specially modified for the fuel. This is also true of some forms of biodiesel. This is such a hazard that car and truck manufacturers will not honor warranties for most vehicles if the owner purchases gasoline or diesel with more than 10% ethanol.
Some claim that burning wood to produce electricity produces “good” CO 2 because the trees cut down for fuel will be replaced by trees that will absorb the CO 2 . This may or may not be true, but either way the cost of cutting down trees, planting new ones, preparing and transporting the wood to a power plant can be so high, as to prohibit its use in the absence of subsidies and mandates. The EU is the world’s largest wood pellet market, largely due to mandates. In the EU, Italy and Germany are the largest consumers.
The EROI of a fuel, especially a transportation fuel, must exceed three for it to be useful and some researchers set the economic limit even higher. The EROI of burning wood for electricity is very low, around 10 (Nationale Akademie der Wissenschaften – Leopoldina 2012, p. 10). It is much lower than the EROI of burning coal (45 to 80), even with a full set of pollution scrubbers on the coal-burning power plant. For lower quality coal or lignite, such as that used in Germany, the EROI can be as low as 30. The EROI of corn-based ethanol, for comparison purposes, is between 1.25 and 3.5.
Some argue that the energy put into corn farming and ethanol production exceeds the energy yield from the fuel (Patzek 2014). Or, put another way, “The fossil energy inputs required for farming and processing often cancel out most of the energy delivered” (Nationale Akademie der Wissenschaften – Leopoldina 2012, p. 9). The U.S. taxpayer subsidies to the industrial corn-ethanol industry were $3.3 billion in 2004. The increase in biofuel production really took off in 2005 and this was one of the causes of an increase in food prices that began that year, see (Tyner 2008). When ethanol production flattened out in 2012 due to the ethanol 10% “blend wall” (see below for details) then food prices stopped rising.
The reason many want to use biofuels is that they hope using them will reduce greenhouse emissions. However, numerous studies have shown that is not the case. In August 2012 the German National Academy of Sciences found that removing biomass from the area where it was grown and using it for fuel is:
“… neither renewable nor carbon neutral, instead it is energy- and CO 2 negative.” (Nationale Akademie der Wissenschaften – Leopoldina 2012, p. 6)
This is apparent because removing the biomass also removes nutrients needed to grow the plants, they must be replaced using manufactured fertilizer. The carbon cycle cannot be separated from the nutrient cycle without cost (Nationale Akademie der Wissenschaften – Leopoldina 2012, p. 6). Pesticides are also needed to increase yield, farming requires a lot of equipment and fuel, and the land used for the biomass farm is land that could be forest or grassland that would sequester carbon or a farm producing food, reducing food costs. The loss of arable land has a cost, it increases the cost of food or it emits greenhouse gases.
Algae biodiesel
ExxonMobil and Synthetic Genomics, Inc. have developed a strain of algae that is able to convert carbon into an energy-rich fat that can be processed into biodiesel (Ajjawi, et al. 2017). Making biofuels from algae is not new, but this particular genetically-modified species of algae is more than twice as energy rich (twice the fat content) as other types of algae. A significant advantage of this algae is that growing it does not require farmland and it has little to no effect on our food supply. This is a promising technology, but still in the research stage and the economic viability of this renewable option is not known.
The U.S. Department of Energy (DOE) spent millions of dollars making biofuels from algae between 1978 and 1996 before shutting the project down without any positive results (Kiefer 2013, p. 3). The problems identified by the DOE were mainly economic. The main difference with the Exxon-Mobil project is in the algae used.
Ethanol from corn and cellulose and the ethanol mandate
The U.S. government Renewable Fuel Standard (RFS) mandates that the crude oil refining industry buy a specific amount of ethanol each year and pay heavy fines if they don’t. They are ordered to buy a product they do not want and punished if they don’t buy it, yet some news sources claim this is a subsidy to the fossil fuel industry. The EPA administers the program and has the authority to waive the statutory ethanol targets. This has had the effect of making the rule unpredictable and arbitrary. Further, the mandate to use more cellulosic ethanol, ethanol from grass and other non-standard crops, has never worked. The manufacturing process has technical and economic hurdles that are overwhelming. So, the mandate to use cellulosic ethanol, a supposedly “advanced” biofuel has been waived every year since 2013. Exxon-Mobil and some other companies are still looking for an economic method to convert cellulose to biodiesel, but no viable solutions have been found. It is worth considering that the first cellulosic ethanol plant opened in the United States in 1910 and it failed. So, despite 110 years of trying, cellulosic ethanol and biodiesel are still not economically viable (Kiefer 2013, p. 3). Mandating the use of a technology that has not been invented yet is foolish, but we are talking about the government, they know very little about economic viability.
Each year the EPA dictates the required overall volumes of various transportation biofuels for the following year. Then it projects the amount of fuel consumption expected for the period and dictates the amount of ethanol that the refining industry must purchase, regardless of how much they can use. Each gallon of ethanol produced or imported is assigned a unique renewable identification number, a “RIN.” These RIN’s are tradable and can be bought by refineries to offset ethanol they are ordered to purchase but cannot use. A refinery that uses more than they are ordered to use can sell RINs. Another way to obtain RINs is to purchase expensive “advanced” biofuels or biodiesel from overseas so they over-comply with the “advanced biofuel” part of the RFS to gain RINs. See a recent post by Paul Driessen here.
A problem is created because the ethanol producers want the government to force the refiners to take more ethanol, but the refiners face a “blend wall.” With today’s engines, the maximum ethanol content in gasoline is 10%, more than that and engine damage can result. To make matters worse, sales of heavily subsidized electric vehicles and hybrids and cars with better gasoline mileage are reducing the total demand for gasoline. The mandate is for volumes of ethanol, irrespective of the volume of gasoline sold. Many refiners put as much ethanol as they can into their gasoline, but will still fall short of the government mandates, so they are forced to buy RINs from others, especially biodiesel manufacturers, often these manufacturers are overseas companies. This drives up the price of RINs, meaning that biodiesel and the specialty 85% ethanol fuel are heavily subsidized simply because they generate valuable RINs.
The compliance burden falls most heavily on large refiners, because small refineries are routinely granted exemptions from the RFS requirements. In August of 2019, 31 small refiners were granted exemptions from the RFS. The angry corn-ethanol producers then furiously complain and demand that the EPA allow the sale of higher-percentage ethanol blends, raise the RFS and stop granting exemptions. This causes the automobile manufacturers to refuse to honor their car warranties to anyone that puts more than 10% ethanol gasoline in their cars. If refiners are forced to pay any more for their RINs, they claim they will go bankrupt. It is a perfect whirlwind of lobbyists, lawyers and government bureaucrats, who are the only ones who make any money out of this mess. This is a perfect candidate for deregulation, but instead President Trump ordered the EPA to move towards E15 (gasoline with 15% ethanol) and has suggested fixes for the RIN market, he essentially caved to the ethanol and farm lobbies.
Recently, Reuters reported that the Trump administration has decided to drastically scale back the EPA’s program to exempt small oil refineries from the country’s biofuel regulations. The Trump administration has more than quadrupled the number of exemptions since 2015, protecting a large number of small refineries. However, the 10th Circuit Court of Appeals has ruled that the EPA exceeded its authority since many of the new exemptions are for refineries that had not received the exemption before, it ruled that the refineries getting the exemption must have previously received one. As of March 4, 2020, the EPA has not said what it will do, but acknowledged that they needed to “quell” the market for RINs. The market for gasoline and diesel has shrunk, but the ethanol mandates have not.
Costs and benefits of biofuels, EROI
The National Academies of Sciences says that biofuels can only be competitive, without subsidies and mandates, if gasoline costs over five dollars a gallon or when crude oil reaches $191 per barrel. These are prices we are very unlikely to reach in the foreseeable future.
As explained above, energy used to make a fuel, like a biofuel, must be much less than the energy output for the fuel to be useful. An EROI of one means just as much energy was used to make the fuel as we can get out of it, but this isn’t good enough. We are inefficient in the way we use fuel, for example cars with conventional gasoline engines are only about 30% efficient and natural gas combined-cycle electric power plants are only 50% efficient, so an EROI of one is not good enough. The best solar panels convert 15% to 22% of the sun’s energy into electricity and must contend with cloudy days and nighttime. Windmills are only 38% efficient on average and only extract 50% of the energy that flows through the rotor area. Solar and windmill overall efficiency varies with location, but in Germany, on average, solar efficiency is 8% of rated capacity and wind is 17% of rated capacity.
Estimates vary, but, most calculations show that corn-based ethanol has an EROI of only 1.25 (Kiefer, 2013). Other estimates are as high as 3.5 (Weissbach, et al. 2018). When we consider the loss of energy when using ethanol in a vehicle, this is a negative return. Cars and trucks are not perfectly efficient, so breakeven has been estimated to be around three by Hall, et al. (2009). According to Kiefer, even ancient Rome did better with grain for slaves, oxen and horses, their maximum EROI was about 4.2. In building the colosseum the EROI was 1.8. Weissbach, et al. (Weissbach, et al. 2018, p. 7-8) place the EROI economic threshold much higher, at about 10:1 to maintain our modern standard of living, which may be more realistic. Weissbach also explains the difference between fossil fuels and wind and solar, which require “buffering” (Weissbach, et al. 2018, p. 8) to smooth out their fluctuations in output.
Weissbach explains that the methods used to compute EROI and the country used to do the computation affect the calculation, as we mentioned above. For example, a natural gas turbine in a less developed country will have a higher EROI than one in an industrialized country, this is due to the lower cost of labor in the less developed country. Money is a good proxy for the input energy in a power plant but using costs as input changes the computed EROI for any given power source according to the location.
Coal-fired steam engines came along in the 1800s with an EROI of 10:1 or more. In the early coal mining days extracting coal was very easy since it was accessible at the surface or very near the surface. This was a good thing because early steam engines were very inefficient. However, as coal-fired steam engines proliferated they replaced slave labor, so the social and economic benefits were large.
Our civilization depends very much on EROI as the surplus energy (energy not used in obtaining and using fuels) helps define our affluence. Because we currently enjoy a large energy surplus, we can spend our time doing other things than simply growing food and gathering wood for shelter or to cook the food.
It is well documented that wealth and standard of living are closely related to energy consumption (see Figure 1). Obviously, energy consumption is related to price, the cheaper the energy the more we consume and the better off we are. Timothy Garrett (2011) has shown that every additional 9.7 milliwatts consumed increases our global wealth by one 1990 U.S. dollar. Other documentation of the intimate relationship between energy consumption and wealth can be seen here and here. The quickest way to raise people out of poverty is to supply them with cheaper energy and the quickest way to throw more into poverty is to raise the price of energy.
Figure 1. The x axis is energy consumption per person and the y axis is the United Nations human development index, or human prosperity. The correlation between the logarithm of energy consumption per person and prosperity is striking. Source: Exxon-Mobil, page 6, click on image to see in higher resolution.
The U.S. devotes 38 million acres of land to corn raised to make ethanol, this is about half of the land used in the U.S. to grow grains and vegetables. The price of corn went from $87 per metric ton in 2006 to $217 per metric ton in 2008, an increase of 150%. This rapid jump in price was an unintended consequence of the ethanol subsidies and higher oil and gas prices (Tyner 2008).
The diversion of arable land for ethanol production raises the price of all foods and because the U.S. is a major exporter of food, it raises prices all over the world. It is estimated that the cost of rice and flour increased 50% after the RFS was created. The RFS is a hidden food tax that is highly regressive and affects poor people much more than the middle class or wealthier people.
The logic behind the RFS is that corn ethanol is supposed to reduce carbon dioxide emissions by 20% over the gasoline replaced. However, this depends upon the way the corn was grown and converted into ethanol. Some studies suggest that the 20% reduction is more than offset by emissions on the farm and in the distillery. Further, the farm and distillery emit ozone, particulate matter and sulfur dioxide. The farms also use a lot of nitrogen-based fertilizers, which produce nitrogen oxides that pollute the air or can be washed into rivers causing water pollution.
The nitrogen-based fertilizers used today come from the Haber-Bosch process that uses natural gas (methane), water and nitrogen from the atmosphere to produce ammonia, which is then used to make fertilizer, see Figure 2. Roughly three to five percent of the natural gas used in the world each day is used to make fertilizer. Natural gas is not required to make the fertilizer, but all other sources of hydrogen are too expensive to be practical. Both Fritz Haber and Carl Bosch won Nobel Prizes for their work developing the manufacturing process. Today’s corn plants are bred and genetically engineered to optimize their use of this ammonia-based fertilizer. This has allowed farmers to raise the pre-Haber-Bosch corn yield from about 32 bushels per acre in 1906 to 170 bushels of corn per acre today (Kiefer 2013, p. 8). The extensive production of corn-ethanol would not be possible except for the large amount of natural gas used to make fertilizer. If we were to choose not to produce natural gas by way of a ban on hydraulic fracturing, corn yields would plummet to pre-World War II levels and corn-ethanol production would grind to a halt.
Figure 2. A schematic of the Haber-Bosch ammonia manufacturing process. Three percent of the world’s natural gas production is used to make fertilizer using this process. Source: Francis E. Williams, via Wikimedia commons. Click on the image to see it in higher resolution.
Other processes for making ammonia from air are being investigated and some show promise, such as the new SWAP process. But none are working at a commercial scale yet. One of the problems with SWAP is that it requires a lot of samarium, which is very expensive, about $360 per 100 grams.
The irony of pushing to replace fossil fuels with corn-ethanol, is obvious. Fossil fuels are required to fertilize, grow and transport the corn used to make ethanol. Manufacturing ethanol requires natural gas, then special plumbing and pipelines are required to transport it. If more than 10% ethanol is blended into gasoline or diesel, special engines are required to burn it. Except to lobbyists and lawyers, it makes no sense.
Soybean, palm, canola oils and biodiesel
Corn-based ethanol has its problems, but the soybean oil, canola oil and palm oil used as biofuels (biodiesel) in Europe and the U.S.A. are probably worse. The European Union and the U.S.A. heavily subsidize these biofuels, and this has raised the price of palm and soybean oil. While subsidizing biodiesel through renewable energy policies, the EU also criticizes and punishes other countries, including the U.S. for subsidizing the same goods. The high demand for palm-oil biodiesel has caused Indonesia, Malaysia and other producing countries to cut down their forests and grow huge crops to sell to European refineries. The schizophrenic combination of both subsidies and tariffs on biodiesel reveal how nonsensical the whole concept is. When U.S. biodiesel subsidies were withdrawn in 2016, ten manufacturers shut down. The whole industry would probably disappear without subsidies. Western economies require a high EROI and both Weissbach and Kiefer believe that biodiesel and other biofuels are subeconomic there. The U.S. biodiesel subsidies were reinstated and made retroactive in 2019.
Canola (rapeseed) is grown in Europe, Canada and other countries and used to make biodiesel in many locations. In the U.S. soybean oil is preferred as a feedstock for biodiesel, but canola oil and recycled cooking oils are also commonly used. In the U.S. biodiesel is commonly blended with petroleum diesel in percentages ranging from 5% to 20% biodiesel.
Palm-oil biodiesel (blended 20% to 50% with petroleum diesel) results in lower emissions of carbon monoxide, particulates (smoke) and hydrocarbons than regular diesel, but if that palm-oil came from a cleared tropical rainforest, according to the EU, then palm-oil biodiesel is not sustainable and should not qualify under the EU RFS. Of all the feedstock crops for biodiesel, palm oil has the best characteristics as a fuel, second only to petroleum diesel. It is also less likely to damage engines. All vegetable oil-based biodiesel products deteriorate with time (biodegrade) but palm-oil seems to be the most stable.
Even though Sir Rudolf Diesel ran his conventional diesel engines using vegetable oil without any modification, today this isn’t practical. Vegetable oils, including palm-oil, have a large molecular mass, low volatility and high viscosity, this reduces the performance of the engine and, in low temperatures, causes the fuel to become an unpumpable gel. In addition, they have a short shelf life. To solve these problems, the vegetable biodiesel is typically blended with petroleum diesel or alcohol and a surfactant at elevated temperatures. Other processes to prepare biodiesel for modern diesel engines are complex chemical processes, including pyrolysis and transesterification. These processes create a product that can damage engines (Nationale Akademie der Wissenschaften – Leopoldina 2012, p. 47) and the processes create a lot of wastewater that requires expensive processing before it can be discharged (Zahan and Kano 2018, p. 2).
In the production of biodiesel, only the lipid fraction is used, and this is only 20-50% of the plant dry mass, thus the energy yield per square meter of farmland is lower than for ethanol and much lower than for biogas. Just as serious is the potential damage to very expensive diesel engines, the risks are high enough that the manufacturers of newer, highly efficient engines have refused to sanction the use of biodiesel in their vehicles. The risks to engines include dilution of motor oil, coking of piston rings, corrosion of hydraulic components (including hydraulic lines, a safety issue) and fouled injectors. These problems arise from poor production practices and fuel aging, since the fuel deteriorates with age (Nationale Akademie der Wissenschaften – Leopoldina 2012, p. 47).
While biodiesel can lower the emissions of CO 2 and particulate matter, it increases fuel consumption per mile, reduces engine power, and increases NOx (nitrogen oxides, a family of pollutants) emissions. The main cost of making biodiesel is the cost of the feedstock, because vegetable oil is expensive. In the U.S., biodiesel was 15-30% more expensive than petroleum diesel in 2017, even with subsidies (Zahan and Kano 2018).
Discussion and Conclusions
Biofuels are not economically viable at today’s oil and natural gas prices. Their EROI will not sustain the quality-of-life a developed nation is used to today. In other words, to adopt biofuels, the western world must either heavily subsidize them, imposing a hidden tax on their citizens in order to support farmers and biofuels manufacturers, or they must accept a much lower quality-of-life, aka “Human Development Index,” as shown in Figure 1.
Even if petroleum oil and gas prices were to rise to a level where biofuels could compete on a level playing field, with today’s technology, the biofuel EROI shows us that our standard of living would have to go down substantially. There is no reason to prop up biofuels for some uncertain future, their EROI alone shows us we could not use them under any circumstances. If pressed by high fossil fuel prices, we would choose a fuel with a higher EROI, like nuclear fission or fusion, in order to maintain our quality-of-life and standard-of-living. People hate to go backwards, which is what biofuels would demand.
How did we get here? The original ethanol subsidy was part of the 1978 Energy Policy Act (Tyner 2008). It was originally 40 cents per gallon, it has varied from 40 to 60 cents per gallon ever since and is currently 45 cents. This is on top of state and local subsidies that can raise the total to $1.38 per gallon. The subsidy program was revised under President George W. Bush in 2004. Both, the original subsidy and Bush’s Volumetric Ethanol Excise Tax were meant to help America achieve energy independence. However, the U.S. is already energy independent due to shale gas and oil, invalidating the original reason for the subsidies.
After the U.S. was well on its way to energy independence, U.S. Senator Tom Coburn led an effort to repeal the ethanol subsidy in 2011, but the repeal was fought vigorously by Iowa Senators Chuck Grassley and Joni Ernst, it failed to pass by 59 to 40. The corn and ethanol lobbies are very powerful.
The Energy Policy Act of 2005 mandated a one dollar a gallon subsidy for new agricultural biodiesel and 50 cents to used feedstocks like fryer grease. This tax credit expired in 2016 and ten biodiesel manufacturers shut down, then it was retroactively extended late in 2019. Some articles claim this subsidy and the ethanol subsidy benefit the oil and gas industry, which is nonsense, it hurts both them and the consumer. This is why small petroleum refineries are granted RFS waivers, so they do not shut down. The small refineries are even granted waivers if they are owned by Exxon-Mobil, and for good reason, we want them to stay open. The subsidies benefit farmers and ethanol and biodiesel refineries, which are not part of the oil and gas industry. Just more fake news about oil and gas subsidies, similar to the false claim that the Low Income Energy Assistance (LIHEAP) welfare program is an oil and gas subsidy.
So, we see how a government program, created during an oil and gas crisis in 1978, becomes a permanent corporate welfare program for farmers and biofuel refiners. It has created a constituency that is totally dependent upon government handouts. Like all such programs, the taxpayers and consumers are the victims.
Works Cited
Ajjawi, I., J. Verruto, M. Aqui, Leah B Soriaga, Jennifer Coppersmith, Kathleen Kwok, Luke Peach, et al. 2017. “Lipid production in Nannochloropsis gaditana is doubled by decreasing expression of a single transcriptional regulator.” Nature Biotechnology. doi:https://doi.org/10.1038/nbt.3865.
Kiefer, Captain Todd A. “Ike”. 2013. Twenty-First Century Snake Oil: Why the United States Should Reject Biofuels as Part of a Rational National Security Energy Strategy. Waterloo Institute for Complexity and Innovation. https://phe.rockefeller.edu/docs/Kiefer%20-%20Snake%20Oil2.pdf.
Nationale Akademie der Wissenschaften – Leopoldina. 2012. “Bioenergy – Chances and Limits.” https://www.leopoldina.org/uploads/tx_leopublication/201207_Stellungnahme_Bioenergie_LAY_en_final_01.pdf.
Patzek, Tad. 2014. Thermodynamics of the Corn-Ethanol Biofuel Cycle. fusion4freedom. http://fusion4freedom.us/corn-bio-fuel/.
Tyner, Wallace E. 2008. “The US Ethanol and Biofuels Boom: Its Origins, Current Status, and Future Prospects.” Bioscience 58 (7). doi:https://doi.org/10.1641/B580718.
Weissbach, D., F. Hermann, G. Ruprecht, and A. Huke. 2018. “Energy intensities, EROI (energy returned on invested), for electric sources.” EPJ Web of Conterences. https://www.epj-conferences.org/articles/epjconf/pdf/2018/24/epjconf_eps-sif2018_00016.pdf.
Zahan, Khairul, and Manabu Kano. 2018. “Biodiesel Production from Palm Oil, Its By-Products, and Mill Effluent: A Review.” Energies 11. https://www.researchgate.net/publication/327066949_Biodiesel_Production_from_Palm_Oil_Its_By-Products_and_Mill_Effluent_A_Review.
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wattsupwiththat--2020-03-13--Washington Bill Would Open Up Possibility of Regressive, Harmful Cap-and-Trade Program  or Carbon-Di

Washington Bill Would Open Up Possibility of Regressive, Harmful Cap-and-Trade Program  or Carbon-Dioxide Tax

A bill introduced in the Washington House of Representatives would give the state Department of Ecology ( DOE ) the authority to create either a carbon-dioxide tax or cap-and-trade system , or both , in the Evergreen State .
If passed , DOE could establish each program without any sort of legislative approval .
Washington voters have signaled their opposition to a carbon-dioxide tax multiple times in the past half decade , most recently with their thorough rejection of Initiative 1631 ( I-1631 ) in 2018 .
Carbon-dioxide taxes are inherently regressive and disproportionally harm low-income families .
The Congressional @ @ @ @ @ @ @ $ 28 per ton carbon dioxide tax would result in energy costs being 250 percent higher for the poorest one-fifth of households than the richest one-fifth of households .
CBO reports the reason for cost discrepancy is “ a carbon tax would increase the prices of fossil fuels in direct proportion to their carbon content .
Higher fuel prices , in turn , would raise production costs and ultimately drive up prices for goods and services throughout the economy … Low-income households spend a larger share of their income on goods and services @ @ @ @ @ @ @ such as electricity and transportation.
” WPC estimated the carbon-dioxide tax that would have been established under I-1631 would increase average household costs $ 234 to $ 305 in the first year alone , and $ 672 to $ 877 per year after 2030 .
“ Taxpayers would feel the tax primarily in three ways .
First , the largest impact would be at the gas pump , ” WPC states , noting prices at the pump would increase by 14 cents a gallon during the first year and increase by two cents @ @ @ @ @ @ @ Second , ” the report continues , “ a smaller portion , on average , would be associated with the cost of natural gas for home heating .
Finally , since Washington ’ s electricity is mostly carbon-free , there would be a smaller impact felt in most utility bills.
” A 2013 study by the National Association of Manufacturers estimates a $ 20-per-ton carbon-dioxide tax in Washington , a threshold that would be have been met in 2022 under I-1631 , would result in a 15 percent increase in household electricity rates @ @ @ @ @ @ @ gas would increase by more than 40 percent in the first year .
The study also estimates a carbon-dioxide tax would push gasoline prices up by 20 cents a gallon in the first year alone .
One other substantial problem with the carbon-dioxide tax is that it would produce an insignificant environmental benefit , as Oren Cass , senior fellow at the Manhattan Institute , noted in National Affairs .
“ The effectiveness of a carbon tax as a matter of environmental policy [ depends ] not only on how it would directly @ @ @ @ @ @ @ emissions but also on its ability to affect global emissions by driving globally applicable technological innovation or by influencing the behavior of foreign governments , ” wrote Cass .
“ On each of these dimensions , the carbon tax fails.
” Advocates of cap-and-trade schemes point to California and the 10 northeastern states that make up the Regional Greenhouse Gas Initiative ( RGGI ) as examples of how these programs can be successfully implemented .
In reality , cap-and-trade programs do little to reduce carbon dioxide emissions .
Even worse , they are @ @ @ @ @ @ @ disproportionally burden low-income households , who are less able to afford higher energy and gasoline costs that these programs are designed to produce .
According to the U.S. Energy Information Administration , retail electricity prices in the 10 RGGI states and California are currently 45 percent higher than the U.S. average .
Thanks to its copious hydroelectric power sources , however , the Evergreen State currently has some of the lowest retail electricity prices in the United States at 8.0 cents per kilowatt hour .
This rate is 23 percent below the U.S. @ @ @ @ @ @ @ study reports that only Colorado has lower total energy costs than Washington .
Evergreen State lawmakers should not enact anything that would give DOE the authority to establish either a cap-and-trade or a carbon-dioxide tax .
Both programs would have a minimal effect on carbon-dioxide emissions and both would cause considerable economic harm to all Washingtonians , especially low-income Washington families .
The following documents provide more information on cap-and-trade programs and carbon-dioxide taxes .
Legislating Energy Poverty : A Case Study of How California ’ s and New York ’ s Climate @ @ @ @ @ @ @ Hurting the Economy https : //www.pacificresearch.org/wp-content/uploads/2018/12/LegislatingEnergy_F_Web.pdf This analysis from Wayne Winegarden of the Pacific Research Institute shows the big government approach to fighting climate change taken by California and New York hits working class and minority communities the hardest .
The paper reviews the impact of global warming policies adopted in California and New York , such as unrealistic renewable energy goals , strict low carbon fuel standards , and costly subsidies for buying higher-priced electric cars and installing solar panels .
The report finds that , collectively , these expensive and burdensome @ @ @ @ @ @ @ of their respective state residents .
A Review of the Regional Green Gas Initiative https : //object.cato.org/sites/cato.org/files/serials/files/cato-journal/2018/2/cato-journal-v38n1-chapter-11.pdf This Cato Journal article authored by David T. Stevenson of the Caesar Rodney Institute finds the Regional Greenhouse Gas Initiative has not shown any added emissions reductions or associated health benefits , has had minimal impact on energy efficiency and low-income fuel assistance , and has increased regional electric bills .
Less Carbon , Higher Prices : How California ’ s Climate Policies Affect Lower-Income Residents https : //www.heartland.org/publications-resources/publications/less-carbon-higher-prices-how-californias-climate-policies-affect-lower-income-residents This study from Jonathan Lesser of the @ @ @ @ @ @ @ power regulations , including the state ’ s renewable power mandate , is a regressive tax that harms impoverished Californians more than any other group .
Five Myths of Cap-and-Trade https : //www.heartland.org/publications-resources/publications/five-myths-of-cap-and-trade Articles supporting cap-and-trade programs rest on a number of fallacies .
In this article by Todd Myers of the Washington Policy Center , Myers identifies and explores five persistent myths concerning cap-and-trade , including the belief that a cap on carbon dioxide emissions guarantees emissions reduction .
The Deeply Flawed Conservative Case for a Carbon Tax https : //www.heartland.org/publications-resources/publications/the-deeply-flawed-conservative-case-for-a-carbon-tax In @ @ @ @ @ @ @ Institute , Benjamin Zycher says the “ conservative ” Climate Leadership Council ’ s ( CLC ) much-hyped carbon-tax proposal is “ naïve ” and “ virtually all of the … assertions in support of its proposal are incorrect or implausible.
” The CLC ’ s plan is “ poor conceptually and deeply unserious , ” wrote Zycher .
The Case Against a U.S .
Carbon Tax https : //www.heartland.org/publications-resources/publications/the-case-against-a-us-carbon-tax In this paper from the Cato Institute , Robert P. Murphy , Patrick J. Michaels , and Paul C. Knappenberger examine carbon-dioxide tax @ @ @ @ @ @ @ Columbia and consider whether similar programs would be successful in the United States .
They conclude , “ In theory and in practice , economic analysis shows that the case for a U.S. carbon tax is weaker than its most vocal supporters have led the public to believe.
” Economic Outcomes of a U.S .
Carbon Tax https : //www.heartland.org/publications-resources/publications/economic-outcomes-of-a–us-carbon-tax This report from the National Association of Manufacturers evaluates the potential impacts carbon taxes whose revenues would be devoted to a combination of debt and tax rate reduction would have on the U.S. @ @ @ @ @ @ @ economic effects of fossil-fuel cost increases caused by carbon taxes , as well as the positive economic effects of the assumption that carbon tax revenues would be used to reduce government debt and federal taxes .
The Carbon Tax Shell Game https : //www.heartland.org/publications-resources/publications/the-carbon-tax-shell-game Oren Cass of the Manhattan Institute argues the carbon tax is a shell game .
The range of designs , prices , rationales , and claimed benefits varies so widely that assessing the validity of most proposals is nearly impossible to accomplish .
In this article for National Affairs @ @ @ @ @ @ @ taxes on emissions has proven to be insubstantial , a fact he says is ignored by the tax ’ s proponents when promoting its purported benefits .
The U.S .
Leads the World in Clean Air : The Case for Environmental Optimism https : //files.texaspolicy.com/uploads/2018/11/27165514/2018-11-RR-US-Leads-the-World-in-Clean-Air-ACEE-White.pdf This paper from the Texas Public Policy Foundation examines how the United States achieved robust economic growth while dramatically reducing emissions of air pollutants .
The paper states that these achievements should be celebrated as a public policy success story , but instead the prevailing narrative among political @ @ @ @ @ @ @ decline that can only be reversed with a more stringent regulatory approach .
Instead , the paper urges for the data to be considered and applied to the narrative .
Climate Change Reconsidered II : Fossil Fuels – Summary for Policymakers https : //www.heartland.org/publications-resources/publications/climate-change-reconsidered-ii-fossil-fuels—summary-for-policymakers In this fifth volume of the Climate Change Reconsidered series , 117 scientists , economists , and other experts assess the costs and benefits of the use of fossil fuels by reviewing scientific and economic literature on organic chemistry , climate science , public health , economic history , @ @ @ @ @ @ @ on integrated assessment models ( IAMs ) and cost-benefit analysis ( CBA ) .
The Social Benefits of Fossil Fuels https : //www.heartland.org/publications-resources/publications/the-social-benefits-of-fossil-fuels This Heartland Policy Brief by Joseph Bast and Peter Ferrara documents the many benefits from the historic and still ongoing use of fossil fuels .
Fossil fuels are lifting billions of people out of poverty , reducing all the negative effects of poverty on human health , and vastly improving human well-being and safety by powering labor-saving and life-protecting technologies , such as air conditioning , modern medicine , and @ @ @ @ @ @ @ increasing the quantity of food humans produce and improving the reliability of the food supply , directly benefiting human health .
Further , fossil fuel emissions are possibly contributing to a “ Greening of the Earth , ” benefiting all the plants and wildlife on the planet .
Nothing in this Research & Commentary is intended to influence the passage of legislation , and it does not necessarily represent the views of The Heartland Institute .
For further information on this subject , visit Environment & Climate News , The Heartland Institute ’ @ @ @ @ @ @ @ ’ s free online research database .

Research and commentary by Tim Benson
A bill introduced in the Washington House of Representatives would give the state Department of Ecology (DOE) the authority to create either a carbon-dioxide tax or cap-and-trade system, or both, in the Evergreen State. If passed, DOE could establish each program without any sort of legislative approval.
“Department of Ecology staff could create rules that covered companies that emit as few as 25,000 metric tons of [carbon dioxide],” writes Todd Myers of the Washington Policy Center (WPC). “In Washington state, that would include food producers like El Oro Cattle Feeders in Moses Lake and Lamb Weston in Quincy. It could include timber mills like SDS Lumber in Bingen and Vaagen Brothers in Colville. It would include semiconductor manufacturers and solar panel manufacturers.”
Washington voters have signaled their opposition to a carbon-dioxide tax multiple times in the past half decade, most recently with their thorough rejection of Initiative 1631 (I-1631) in 2018.
Carbon-dioxide taxes are inherently regressive and disproportionally harm low-income families. The Congressional Budget Office (CBO) found a $28 per ton carbon dioxide tax would result in energy costs being 250 percent higher for the poorest one-fifth of households than the richest one-fifth of households.
CBO reports the reason for cost discrepancy is “a carbon tax would increase the prices of fossil fuels in direct proportion to their carbon content. Higher fuel prices, in turn, would raise production costs and ultimately drive up prices for goods and services throughout the economy … Low-income households spend a larger share of their income on goods and services whose prices would increase the most, such as electricity and transportation.”
WPC estimated the carbon-dioxide tax that would have been established under I-1631 would increase average household costs $234 to $305 in the first year alone, and $672 to $877 per year after 2030. “Taxpayers would feel the tax primarily in three ways. First, the largest impact would be at the gas pump,” WPC states, noting prices at the pump would increase by 14 cents a gallon during the first year and increase by two cents a gallon each following year. “Second,” the report continues, “a smaller portion, on average, would be associated with the cost of natural gas for home heating. Finally, since Washington’s electricity is mostly carbon-free, there would be a smaller impact felt in most utility bills.”
A 2013 study by the National Association of Manufacturers estimates a $20-per-ton carbon-dioxide tax in Washington, a threshold that would be have been met in 2022 under I-1631, would result in a 15 percent increase in household electricity rates. Additionally, the price of natural gas would increase by more than 40 percent in the first year. The study also estimates a carbon-dioxide tax would push gasoline prices up by 20 cents a gallon in the first year alone.
One other substantial problem with the carbon-dioxide tax is that it would produce an insignificant environmental benefit, as Oren Cass, senior fellow at the Manhattan Institute, noted in National Affairs. “The effectiveness of a carbon tax as a matter of environmental policy [depends] not only on how it would directly alter the trajectory of [local] emissions but also on its ability to affect global emissions by driving globally applicable technological innovation or by influencing the behavior of foreign governments,” wrote Cass. “On each of these dimensions, the carbon tax fails.”
Advocates of cap-and-trade schemes point to California and the 10 northeastern states that make up the Regional Greenhouse Gas Initiative (RGGI) as examples of how these programs can be successfully implemented. In reality, cap-and-trade programs do little to reduce carbon dioxide emissions. Even worse, they are akin to regressive taxes. Cap-and-trade programs disproportionally burden low-income households, who are less able to afford higher energy and gasoline costs that these programs are designed to produce.
According to the U.S. Energy Information Administration, retail electricity prices in the 10 RGGI states and California are currently 45 percent higher than the U.S. average. Thanks to its copious hydroelectric power sources, however, the Evergreen State currently has some of the lowest retail electricity prices in the United States at 8.0 cents per kilowatt hour. This rate is 23 percent below the U.S. average. Moreover, a 2019 WalletHub study reports that only Colorado has lower total energy costs than Washington.
Evergreen State lawmakers should not enact anything that would give DOE the authority to establish either a cap-and-trade or a carbon-dioxide tax. Both programs would have a minimal effect on carbon-dioxide emissions and both would cause considerable economic harm to all Washingtonians, especially low-income Washington families.
The following documents provide more information on cap-and-trade programs and carbon-dioxide taxes.
Legislating Energy Poverty: A Case Study of How California’s and New York’s Climate Change Policies Are Increasing Energy Costs and Hurting the Economy
https://www.pacificresearch.org/wp-content/uploads/2018/12/LegislatingEnergy_F_Web.pdf
This analysis from Wayne Winegarden of the Pacific Research Institute shows the big government approach to fighting climate change taken by California and New York hits working class and minority communities the hardest. The paper reviews the impact of global warming policies adopted in California and New York, such as unrealistic renewable energy goals, strict low carbon fuel standards, and costly subsidies for buying higher-priced electric cars and installing solar panels. The report finds that, collectively, these expensive and burdensome policies are dramatically increasing the energy burdens of their respective state residents.
A Review of the Regional Green Gas Initiative
https://object.cato.org/sites/cato.org/files/serials/files/cato-journal/2018/2/cato-journal-v38n1-chapter-11.pdf
This Cato Journal article authored by David T. Stevenson of the Caesar Rodney Institute finds the Regional Greenhouse Gas Initiative has not shown any added emissions reductions or associated health benefits, has had minimal impact on energy efficiency and low-income fuel assistance, and has increased regional electric bills.
Less Carbon, Higher Prices: How California’s Climate Policies Affect Lower-Income Residents
https://www.heartland.org/publications-resources/publications/less-carbon-higher-prices-how-californias-climate-policies-affect-lower-income-residents
This study from Jonathan Lesser of the Manhattan Institute argues California’s clean power regulations, including the state’s renewable power mandate, is a regressive tax that harms impoverished Californians more than any other group.
Five Myths of Cap-and-Trade
https://www.heartland.org/publications-resources/publications/five-myths-of-cap-and-trade
Articles supporting cap-and-trade programs rest on a number of fallacies. In this article by Todd Myers of the Washington Policy Center, Myers identifies and explores five persistent myths concerning cap-and-trade, including the belief that a cap on carbon dioxide emissions guarantees emissions reduction.
The Deeply Flawed Conservative Case for a Carbon Tax
https://www.heartland.org/publications-resources/publications/the-deeply-flawed-conservative-case-for-a-carbon-tax
In this paper published by the American Enterprise Institute, Benjamin Zycher says the “conservative” Climate Leadership Council’s (CLC) much-hyped carbon-tax proposal is “naïve” and “virtually all of the … assertions in support of its proposal are incorrect or implausible.” The CLC’s plan is “poor conceptually and deeply unserious,” wrote Zycher.
The Case Against a U.S. Carbon Tax
https://www.heartland.org/publications-resources/publications/the-case-against-a-us-carbon-tax
In this paper from the Cato Institute, Robert P. Murphy, Patrick J. Michaels, and Paul C. Knappenberger examine carbon-dioxide tax programs in place in Australia and British Columbia and consider whether similar programs would be successful in the United States. They conclude, “In theory and in practice, economic analysis shows that the case for a U.S. carbon tax is weaker than its most vocal supporters have led the public to believe.”
Economic Outcomes of a U.S. Carbon Tax
https://www.heartland.org/publications-resources/publications/economic-outcomes-of-a–us-carbon-tax
This report from the National Association of Manufacturers evaluates the potential impacts carbon taxes whose revenues would be devoted to a combination of debt and tax rate reduction would have on the U.S. economy. The results consider the varied economic effects of fossil-fuel cost increases caused by carbon taxes, as well as the positive economic effects of the assumption that carbon tax revenues would be used to reduce government debt and federal taxes.
The Carbon Tax Shell Game
https://www.heartland.org/publications-resources/publications/the-carbon-tax-shell-game
Oren Cass of the Manhattan Institute argues the carbon tax is a shell game. The range of designs, prices, rationales, and claimed benefits varies so widely that assessing the validity of most proposals is nearly impossible to accomplish. In this article for National Affairs, Cass says the effect of carbon-dioxide taxes on emissions has proven to be insubstantial, a fact he says is ignored by the tax’s proponents when promoting its purported benefits.
The U.S. Leads the World in Clean Air: The Case for Environmental Optimism
https://files.texaspolicy.com/uploads/2018/11/27165514/2018-11-RR-US-Leads-the-World-in-Clean-Air-ACEE-White.pdf
This paper from the Texas Public Policy Foundation examines how the United States achieved robust economic growth while dramatically reducing emissions of air pollutants. The paper states that these achievements should be celebrated as a public policy success story, but instead the prevailing narrative among political and environmental leaders is one of environmental decline that can only be reversed with a more stringent regulatory approach. Instead, the paper urges for the data to be considered and applied to the narrative.
Climate Change Reconsidered II: Fossil Fuels – Summary for Policymakers
https://www.heartland.org/publications-resources/publications/climate-change-reconsidered-ii-fossil-fuels—summary-for-policymakers
In this fifth volume of the Climate Change Reconsidered series, 117 scientists, economists, and other experts assess the costs and benefits of the use of fossil fuels by reviewing scientific and economic literature on organic chemistry, climate science, public health, economic history, human security, and theoretical studies based on integrated assessment models (IAMs) and cost-benefit analysis (CBA).
The Social Benefits of Fossil Fuels
https://www.heartland.org/publications-resources/publications/the-social-benefits-of-fossil-fuels
This Heartland Policy Brief by Joseph Bast and Peter Ferrara documents the many benefits from the historic and still ongoing use of fossil fuels. Fossil fuels are lifting billions of people out of poverty, reducing all the negative effects of poverty on human health, and vastly improving human well-being and safety by powering labor-saving and life-protecting technologies, such as air conditioning, modern medicine, and cars and trucks. They are dramatically increasing the quantity of food humans produce and improving the reliability of the food supply, directly benefiting human health. Further, fossil fuel emissions are possibly contributing to a “Greening of the Earth,” benefiting all the plants and wildlife on the planet.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Environment & Climate News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.
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