Pacific Ethanol Slams “Conventional Wisdom” in Indirect Land-Use Change at California Low Carbon Hearings
By Jim Lane
April 14, 2009
In California, Tom Koehler of Pacific Ethanol asked incisive questions at California Air Resources Board hearings on the proposed California Low Carbon Fuel Standard. The proposed standard includes an indirect land-use change component that biofuels supporters say is based on thin, untested science.
Koehler’s presentation, which focuses on Indirect Land Use Change and is downloadable here, is perhaps the most cogent short examination of the ILUC issue from a biofuels producer’s perspective, and asks:
Is conventional wisdom correct?
CW on food versus fuel has proven to be wrong. Current biofuel production volumes are not
driving up food prices; oil prices drive food prices.
Is “the Science settled”?
Science is generating hypotheses, testing them against the available data and choosing
those that best fit the data. Can ILUC models (hypotheses) fit the historical data? Can they
hindcast or backcast previous trends in agriculture?
Will ILUC penalties slow deforestation?
How will penalizing U.S. biofuels producers change the decisions made by illegal timber
operations in the Third World?
Yield, yield & yield
Do ILUC models correctly estimate potential increases in global agricultural yield and
productivity e.g. 700% corn yield increases in Africa? Do they account for new high yielding
biomass feedstocks e.g. switchgrass or miscanthus?
Are they politically feasible?
Will U.S. producers be economically responsible for foreign land owner’s use decisions?
Perhaps all land use change is direct? By holding governments and land owners directly responsible, can we begin to define a more predictable, transparensequestration practices?
In a related development at the California AARB hearings, it was revealed that the California Energy Commission’s Vice-Chair and Presiding member, James Boyd, is married to the COO and Chief of Staff of the Western States Petroleum Association, an oil industry trade organization. Consumer Watchdog has protested Boyd’s presence in matters involving the oil industry.
Meanwhile, Neil Koehler said that the ethanol industry will recover from its current troubles, but speculation is growing that a Pacific Ethanol bankruptcy is imminent and the company may not survive to see the era of advanced biofuels, and that oil companies are swooping in and picking up ethanol plants on the cheap.
Renergie was formed by Ms. Meaghan M. Donovan on March 22, 2006 for the purpose of raising capital to develop, construct, own and operate a network of ten ethanol plants in the parishes of the State of Louisiana which were devastated by hurricanes Katrina and Rita. Each ethanol plant will have a production capacity of five million gallons per year (5 MGY) of fuel-grade ethanol. Renergie’s “field-to-pump” strategy is to produce non-corn ethanol locally and directly market non-corn ethanol locally. On February 26, 2008, Renergie was one of 8 recipients, selected from 139 grant applicants, to share $12.5 million from the Florida Department of Environmental Protection’s Renewable Energy Technologies Grants Program. Renergie received $1,500,483 (partial funding) in grant money to design and build Florida’s first ethanol plant capable of producing fuel-grade ethanol solely from sweet sorghum juice. On April 2, 2008, Enterprise Florida, Inc., the state’s economic development organization, selected Renergie as one of Florida’s most innovative technology companies in the alternative energy sector. On January 20, 2009, Florida Energy & Climate Commission amended RET Grant Agreement S0386 to increase Renergie’s funding from $1,500,483 to $2,500,000. By blending fuel-grade ethanol with gasoline at the gas station pump, Renergie will offer the consumer a fuel that is renewable, more economical, cleaner, and more efficient than unleaded gasoline. Moreover, the Renergie project will mark the first time that Louisiana farmers will share in the profits realized from the sale of value-added products made from their crops.