Renewable Fuel Standard: Potential Economic and Environmental Effects of U.S. Biofuel Policy

In the United States, we have come to depend on plentiful and inexpensive energy to support our economy and lifestyles. In recent years, many questions have been raised regarding the sustainability of our current pattern of high consumption of nonrenewable energy and its environmental consequences. Further, because the United States imports about 55 percent of the nation’s consumption of crude oil, there are additional concerns about the security of supply. Hence, efforts are being made to find alternatives to our current pathway, including greater energy efficiency and use of energy sources that could lower greenhouse gas (GHG) emissions such as nuclear and renewable sources, including solar, wind, geothermal, and biofuels. The United States has a long history with biofuels and the nation is on a course charted to achieve a substantial increase in biofuels. Renewable Fuel Standard evaluates the economic and environmental consequences of increasing biofuels production as a result of Renewable Fuels Standard, as amended by EISA (RFS2). The report describes biofuels produced in 2010 and those projected to be produced and consumed by 2022, reviews model projections and other estimates of the relative impact on the prices of land, and discusses the potential environmental harm and benefits of biofuels production and the barriers to achieving the RFS2 consumption mandate. Policy makers, investors, leaders in the transportation sector, and others with concerns for the environment, economy, and energy security can rely on the recommendations provided in this report. Table of Contents Front Matter Summary 1 Introduction 2 Biofuel Supply Chain 3 Projected Supply of Cellulosic Biomass 4 The Economics and Economic Effects of Biofuel Production 5 Environmental Effects and Tradeoffs of Biofuels 6 Barriers to Achieving RFS2 APPENDIXES Appendix A: Statement of Task Appendix B: Biographical Sketches Appendix C: Presentations to the Committee Appendix D: Glossary Appendix E: Select Acronyms and Abbreviations Appendix F: Conversion Factors Appendix G: Petroleum-Based Fuel Economics Appendix H: Ethanol Biorefineries in Operation or Under Construction in the United States in 2010 Appendix I: Biodiesel Refineries in the United States in 2010 Appendix J: Economic Models Used to Assess the Effects of Biofuel Production in the United States Appendix K: BioBreak Model: Assumptions for Willingness to Accept Appendix L: BioBreak Model Assumptions Appendix M: Summary of Literature Estimates Appendix N: Blend Wall Appendix O: Safety and Quality of Biofuel Coproducts as Animal Feed