Prepared Floor
Statement of Senator Chuck Grassley
Lifecycle Greenhouse Gas Emissions and
Indirect Land Use Changes from Biofuels
Monday, March 23, 2009
Mr. President,
In recent weeks and months, a new phrase has been born that has gained popularity and support.
The new phrase that is so in vogue here in the halls of Congress and at the other end of Pennsylvania Avenue is “green jobs.” Everyone wants to create “green collar jobs.” Green jobs are believed to be a critical component of getting out of the economic doldrums we find ourselves in.
A new White House Middle Class Task Force recently focused on the creation of “green jobs” as a means of fueling our economy and creating good jobs for the middle class. Vice President Biden has defined a “green job” as one that provides products and services that use renewable energy resources, reduce pollution, and conserve energy and natural resources.
I don’t’ disagree that the creation of these types of jobs is a worthy ambition.
This newfound desire for so-called “green jobs” has led me to remind my colleagues of an existing industry that is making great strides to reduce pollution, conserve natural resources and contribute significantly to our economy.
The U.S. renewable fuels industry has been creating good-paying jobs in rural America for years. They’ve been producing a renewable resource right here at home that is reducing our dependence on foreign oil and fossil fuels.
And, it’s contributed to a cleaner environment. U.S. domestic renewable fuels have been doing all these things long before it was cool, or in vogue. But that’s the nature of America’s farmers and ranchers.
They do things because of the intrinsic value to our country and our economy, whether it’s a fad on the East Coast or not.
I think it’s great that there is a newfound zeal for creating renewable resources here at home.
I’ve been supporting our domestic renewable fuels industry for nearly 30 years as a means to reduce our dependence on volatile nations for our energy. I’ve been promoting clean wind energy since I fathered the wind energy tax credit back in 1992. I’m pleased to see the success and the support the wind industry now receives because of my tax incentive.
I hope that my colleagues who tout the benefits of “green jobs” today fully realize the contribution our domestic ethanol and biodiesel industries have made for years in this area.
Farmers across this country produced more than nine billion gallons of homegrown renewable fuel last year. Ethanol production displaced 321 million barrels of oil last year. That’s the equivalent of our imports from Venezuela for 10 months. The use of nine billion gallons of ethanol saved American consumers 32 billion dollars last year.
Yet, even with this success, our farmers and the biofuels industry have been under attack.
In a high-priced public relations smear-campaign, the food manufactures and the Grocery Manufacturers Association has tried tirelessly to denigrate the efforts of our farmers. In a baseless campaign, they tried to blame the ethanol industry for raising food prices – even though corn makes up about a nickel of the cost of a box of cornflakes.
The Grocery Manufacturers thought they found a weak link in the food chain that they could target and scapegoat as the culprit behind the rising cost of food. It was clearly proven that the cost of energy had a significantly greater impact on food prices than did other commodity costs.
The fact is, the ones responsible for the high cost of food are the companies whose names stare back at you on the grocery store shelves. And, they’ve never hidden their motives during this smear campaign. It was stated clearly at the time that the smear campaign was about “protecting their bottom line.”
Consumers are still seeing the impact of that pocket-lining by big food companies. While commodity prices have dropped by half since their highs last summer, food prices are still at record highs.
Even the price of oil has dropped by $100 a barrel, yet food companies continue to keep prices high.
You don’t need to take my word for it. Grocery store chains are now fighting back.
Supervalu, Safeway and Wegmans are just a few chains that are speaking publically against the price increases pushed on them by Kellogg's, General Mills, Kraft, Nestle and others.
An article in the Los Angeles Times on March 2 stated, “One large grocery company operating in Southern California has seen the wholesale price for a carton of Kellogg’s Corn Pops rise about 17 percent since June – despite a 52 percent plunge in corn prices from their peak that month.”
The chief executive for Safeway was quoted as saying, “It’s disingenuous to consumers that all commodity costs are coming down, interest rates are coming down, everything is coming down, and the national brands are taking their prices up.”
The chief executive for Supervalu described the situation as a “battleground” with manufacturers right now over prices. I'm pleased to see others in the food supply chain call on these food producers to lower prices in light of the large drop in commodity prices.
But this isn’t the reason I came to speak today. I’d like to take a few more minutes to share with my colleagues another assault that’s taking place on biofuels.
In the 2007 Energy Independence and Security Act, Congress enacted an expanded Renewable Fuels Standard to greatly increase the production and use of biofuels. A component of that new Renewable Fuels Standard was a requirement that various biofuels meet specified life-cycle greenhouse gas emission reduction targets.
The law specified that lifecycle greenhouse gas emissions are to include direct emissions and significant indirect emission from indirect land use changes.
This means that the emissions from planting, growing and harvesting the feedstock, to the production of the biofuel, must be included.
It also means that the EPA must determine and measure the greenhouse gas impact if there is a significant conversion of forest or prairie to tillable land because of our biofuels policy.
For the past few months, the EPA has been working on a Notice of Proposed Rulemaking to implement the updated Renewable Fuels Standard. While it hasn’t been finalized or made public, there are great concerns within the biofuels industry surrounding the science behind indirect land use changes.
President Obama, during his presidential campaign and as President, has stated that his administration will return to decisions and actions based on “sound science.” In January he said, “Rigid ideology has overruled sound science. Special interests have overshadowed common sense.”
Well, I would encourage President Obama and his staff to take a close look at what the EPA is doing.
There are a couple people in the EPA’s Office of Air and Radiation who firmly believe they can quantify the indirect land use changes that result from our biofuels policy.
I’m afraid the bureaucrats at the EPA are going down a path of blaming our biofuels producers for land use changes around the globe.
The fact is, measuring indirect emissions of greenhouse gas reductions is far from a perfect science, and dozens of credible scientists agree. There is a great deal of complexity and uncertainty surrounding this issue.
One study last year claimed that biofuels, as a result of these “indirect” impacts, actually led to greater emissions and greenhouse gas emissions than gasoline.
This conclusion defies common sense. Under careful scrutiny, credible scientists disproved these conclusions.
Dr. Wang of the Department of Energy’s Argonne National Laboratory replied to these assertions by stating, “There has also been no indication that U.S. corn ethanol production has so far caused indirect land use changes in other countries because U.S. corn exports have been maintained at about two billion bushels a year, and because U.S. distillers grains exports have steadily increased in the past ten years."
There are a number of credible studies that have demonstrated that our biofuels polices will have little, if any, impact on international land use.
A recent study by the Air Improvement Resource found that the production of 15 billion gallons of corn-ethanol by 2015 should not result in new forest or grassland conversion in the U.S. or abroad.
A peer-reviewed study conducted by researchers at the University of Nebraska and published in the Yale Journal of Industrial Ecology found similar conclusions. They concluded that corn-ethanol emits 51 percent less greenhouse gas than gasoline.
A third study conducted by Global Insight found that it is virtually impossible to accurately ascribe greenhouse gas impacts of indirect land use changes to biofuels.
There are a number of assumptions that can affect the conclusions about indirect land use changes. With any model, if you put garbage in, you’ll get garbage out. I want to make sure that the EPA isn’t putting garbage in.
I want to make sure they know yields per acre for corn have doubled between 1970 and today. I want the EPA to know that nitrogen fertilizer use per acre has been declining since 1985.
The EPA also needs to know that the ethanol industry today is vastly more efficient that it was just a few years ago.
Ethanol producers use one-fifth less energy today than they did in 2001. More fuel is being produced from the same amount or even less land.
The California Air Resources Board is also trying to grasp this issue. They’re developing a Low Carbon Fuel Standard, which is penalizing biofuels with an indirect land use change.
On March 2, 2009, 111 scientists sent a letter to California Governor Schwarzenegger on this matter. The scientists are from leading research labs such as Sandia, Lawrence Berkeley, and the National Academy of Sciences, as well as leading educational institutions including MIT, UCLA, Michigan State University and Iowa State University.
The scientists criticized the California Air Resource Board for proposing a regulation that alleges an indirect, price-induced land conversion effect around the globe caused by a demand for agriculture production and biofuels.
The letter states, “The ability to predict this alleged effect depends on using an economic model to predict worldwide carbon effects, and the outcomes are unusually sensitive to the assumptions made by the researchers conducting the model runs. In addition, this field of science is in its nascent stage, is controversial in much of the scientific community, and is only being enforced against biofuels.”
The two primary conclusions of these scientists are that the science surrounding indirect land use changes is far too limited and uncertain for regulatory enforcement. Second, indirect effects are often misunderstood and should not be enforced selectively.
Last week, I joined Senator Harkin and 10 other Senators in appealing to EPA Administrator Lisa Jackson to be cautious on this issue and do no harm.
Because of the incomplete and limited science, we urged against any premature or inaccurate conclusions on indirect land use changes. Instead, the EPA should move forward by allowing for public review and refinement of the methodology they’ve developed.
I’m afraid the climate folks at the EPA are heading in the wrong direction on this. I don’t think they’re bad people, but I’m afraid they don’t understand how American agriculture works.
I don’t think they’re aware of the significant crop yield improvements we’ve seen in recent years or the great potential over the next 20 years.
I also don’t think they fully understand the benefit of valuable ethanol byproducts, which further reduce the effective land used for fuels production.
It defies common sense that the EPA would publish a proposed rulemaking with harmful conclusions for biofuels based on incomplete science and inaccurate assumptions.
The EPA’s actions, if based on erroneous land use assumptions, could hinder biofuels development and extend America’s dependence on dirtier fossil fuels.
Agricultural practices and land use decisions in other countries are not driven by U.S. biofuels polices.
Even if they were, we have no accurate way to measure it scientifically. And, we need to ensure that in that measurement biofuels get credit for increased efficiencies.
President Obama was a strong proponent of our domestic biofuels industry during his time in the Senate. I know he recognizes the benefit of producing home-grown renewable fuels.
I doubt he’d agree with a conclusion that biofuels emit the same or more lifecycle greenhouse gas emissions as gasoline.
I hope the EPA reconsiders this matter.