Tuesday, November 14, 2006

New Studies on Renewable Energy and Biofuels

Governing the Eco-Commons
By J.B. Ruhl

Two reports issued this week suggest a dynamic energy future lies ahead for domestic policy:

Biofuels: The Council for Agriculture, Science, and Technology (CAST) issued a commentary on Convergence of Energy and Agriculture: Implications for Research and Policy (available for free here), discussing the use of energy in agriculture and the food industry in light of current federal and state policies. Energy production from bio-sources also is addressed.

“Because grain-based ethanol is currently the USA’s only major source of biofuels, and because the magnitude of increase in grain-ethanol production is expected to have a large impact on commodity prices, agricultural profitability, and global food security, this Commentary focuses on the key issues concerning corn-based ethanol production systems over the next 5 to 10 years,” says Task Force Chair Dr. Kenneth G. Cassman, Director of the Nebraska Center for Energy Sciences, University of Nebraska, Lincoln. “Much of the discussion also is relevant to fostering development and sustainability of other biofuels systems, including ethanol from sugar crops and ligno-cellulosic biomass, and biodiesel from oilseed crops.”

(CAST is a nonprofit organization established in 1972 as a result of a 1970 meeting sponsored by the National Academy of Sciences, National Research Council. It is composed of scientific societies and many individual, student, company, nonprofit, and associate society members.)

Renewable Sources: A RAND Corporation study (summarized here) finds that renewable resources could produce 25 percent of the electricity and motor vehicle fuels used in the United States by 2025 at little or no additional cost. Renewable sources currently provide about six percent of all U.S. energy supplies. Using a computer model, RAND researchers assessed the possible impact that a 25 percent renewable energy target for electricity and motor vehicle ground transportation could have on total national energy expenditures and on emissions of local air pollutants and carbon dioxide by the year 2025. They found that if renewable energy production costs decline by at least 20 percent between now and 2025, which is consistent with recent experience, the 25 percent figure can be reached unless long-term oil prices fall far below the range currently projected by the federal Energy Information Administration.

Seems like a lot of extrapolations with "ifs" and "unless x happens" loaded in both reports. Would anyone in 1975 have imagined our energy policy would be where it is today? Indeed, in the summer of 1979, during the second OPEC oil crunch, I worked for the Bureau of Economic Analysis, and just for fun we modeled the economy based on the then-insane assumption of $40/barrel. What a hoot!


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