Heads come out of the sand

The US government and big oil now admit climate change is a “serious issue”. But what are they going to do about it? And are biofuels all they’re cracked up to be? By Tom Nicholls Until recently, Washington largely avoided the question of global warming. The US refused to sign up to the only international greenhouse gas emissions (GHG) treaty of any significance to date – the Kyoto Protocol – rendering that process ineffective. Washington said Kyoto’s emissions caps – limits imposed on GHG output – would harm the competitiveness of US companies. It argues that developing nations should be included in any emissions-control scheme: China and India, for instance, are exempt from Kyoto’s emissions caps, giving these giant, rapidly industrialising nations – in Washington’s eyes – an unfair competitive advantage. Global warming is a global problem. And we want everyone else to do something about it. A counter argument is that global warming is only happening because the rich economies of the West have spent decades gorging themselves on energy without giving a thought to the environment. Why should developing countries, which need energy to attain the living standards of the rich world, compromise their growth to pay for the past profligacy of other countries? Nonetheless, the US has a point: China is set to become the world’s biggest global emitter of carbon dioxide by 2010 – overtaking the US. Indian energy usage is also growing very quickly. And because global warming is a global problem, there is not much point in tackling it without the co-operation of the world’s biggest polluters. At a conference held by Cambridge Energy Research Associates (Cera) in Houston, Texas, last month US energy secretary Samuel Bodman repeatedly described climate change as a “global issue that requires a global response”. At the same conference, Bodman listed the fight against climate change as one of Washington’s top priorities in the field of energy. “We must take steps to improve our earth’s environment to reduce pollution and the emissions intensity of the global economy,” he said. Two weeks earlier, a report by the United Nations’ Intergovernmental Panel on Climate Change had said human activity is “very likely” to be contributing to changes in the earth’s climate. In anticipation of that report, President George Bush’s State of the Union address in January had acknowledged climate change as a “serious issue”. Several large US oil companies, until recently, were similarly reluctant to talk about global warming. That has changed. ExxonMobil, for example, long the nemesis of green groups, has subtly shifted its stance on global warming in recent weeks. Last month, Tillerson brought up the subject with unprecedented alacrity: “No discussion about the realities facing our industry today would be complete without reference to the issue of GHG emissions and climate change,” he told a surprised audience at the Cera conference — surprised because, previously, the company has mostly avoided the subject, so spontaneous engagement constitutes a departure. Yet its views on global warming remain basically unchanged: as before, it continues to emphasise that a great deal remains unknown about the science and it continues to argue that efficiency measures and technology – carbon capture and storage, for example – are the best way of dealing with it, as opposed to caps on emissions. The US government also remains opposed to emissions caps. It prefers voluntary emissions-control schemes – which it claims have made “enormous progress” – not mandatory ones, in which companies are forced to limit emissions to a certain amount and pay what amount to fines for polluting above the limit. There has been some speculation that the federal government would follow the example set by some states – notably California – which have broken from the federal line by announcing their own schemes to cap emissions. However, Bodman gave no reason to think that the US government is planning to follow suit. “This administration has been very concerned about making decisions where we would mandate GHG emissions,” Bodman said. The great green hope Biofuels is another prong in the US’ anti-GHG strategy. At the Houston conference, Bodman also mentioned US government plans – announced by Bush in January – to cut US gasoline usage by 20% by 2017, mainly by raising cars’ use of ethanol produced in the US from maize (called corn in the US). It hopes that consumption of alternative fuels will rise to 35 billion gallons by the end of the decade. Bodman added that “if we’re successful on cellulosic ethanol development, we will see a very significant reduction in GHG emissions over time”. These comments suggest that the US’ strategy for reducing GHG emissions rests to a significant extent on existing biofuels technology, local ethanol production and on breakthroughs in technology. As such, it isn’t much of a strategy: the first two have well-documented shortcomings and the third is unknowable. Although biofuels constitute a promising part of the energy matrix, they have a long way to go before they can compete with oil products. The idea behind biofuels sounds too good to be true. And, for now, it is. So-called first-generation biofuels — the bioethanols and biodiesels on the market at the moment — have several deficiencies. They are produced from crops that are also used in the food industry. The US’ mandate for increased ethanol usage has resulted in a significant increase in maize prices, which is also pushing up food prices – an unfortunate side-effect of the drive for increased ethanol production. And ethanol has a lower energy content than petroleum, so a larger volume is needed to do the same job. Land availability is a problem: for example, according to a study last year by the University of Minnesota, nearly 15% of corn grown in the US is converted to ethanol, but this replaces less than 2% of gasoline usage. Even if all the remaining corn were converted to ethanol, it would only replace around 12% of gasoline consumption, the study said. GHG emissions vary too: for instance, Brazil’s sugar-cane ethanol can result in a significantly higher reduction in carbon dioxide emissions over conventional fuels than ethanol produced from maize in the US. There are even questions over whether replacing gasoline with ethanol necessarily results in a net reduction in GHG emissions because making and transporting ethanol in the first place are energy-intensive processes. There are, as a result, considerable doubts about the US’ ability to boost ethanol production from domestic resources sufficiently to meet its ambitious goals for biofuels usage. It would have more of a chance if it could import ethanol from Brazil, which has a highly developed ethanol industry, using relatively efficient sugarcane as a feedstock. But tariffs on imports, designed to protect the US’ ethanol industry, will prevent imports until the end of 2008 at the earliest. Second-generation biofuels offer considerable promise for the future. Produced from biomass — the collective term for organic, non-fossil fuel material — it is hoped that second-generation biofuels will lead to more efficient land use, lower costs and better-quality fuels. The closest to commercial use is cellulose ethanol, which is made from the non-food portion of cereal straws and corn stover. However, second-generation biofuels are not there yet. Significant technology breakthroughs will be needed before they can be deployed commercially, so they can’t yet be factored into plans to cut GHG emissions. The fact that Bodman mentioned cellulose ethanol – a technology development that has not yet happened — when explaining how the government planned to reduce GHG emissions suggests that the government has still not come up with a coherent strategy. This is a concern, given the urgency with which the IPCC and various other august bodies say climate change must be tackled. ExxonMobil, the world’s most successful private-sector oil company, is a pretty good barometer of the attractiveness of an investment decision. Asked about biofuels at the Houston conference, Tillerson’s reply said it all: “I’m not an expert on biofuels, I don’t know much about farming and I don’t have a lot of technology I can add to moonshine.” For now, oil products remain king and the best thing the US could do to reduce its reliance on imported oil would be to become more efficient in its use of the stuff.