valuation of Net Environmental Impacts

Hearing on The National Sustainable Fuels and Chemicals Act of 1999

before

The Committee on Agriculture, Nutrition, and Forestry

United States Senate

Investment in Biobased Fuels and Products Research

The Natural Resources Defense Council agrees with the main findings of The National Sustainable Fuels and Chemicals Act of 1999, namely that the increased use of biomass to produce fuels and other products has the potential to produce a range of important benefits for the United States. Moreover, realizing this potential will require investment in long-term basic research and development and the pre-commercial deployment of promising technologies.

We believe that Federal Government investment in the areas envisioned in this bill is entirely appropriate, and is one of several important policy measures that are needed to move the United States to a sustainable energy economy. The range of benefits for a broad range of interests and the technical promise of biomass technologies are a compelling reason to promote these technologies. Private sector investment, however, is highly unlikely to be sufficient given the long timeline from technology development to commercial deployment.

NRDC therefore endorses the bill and commends Senator Lugar for his leadership on this issue. We encourage the Committee to help the United States take advantage of the benefits offered by biofuels technologies, by moving this bill forward. NRDC appreciates the opportunity to provide the following comments and looks forward to providing the Committee with whatever assistance we can as it considers this bill.

Technology Benefits and Potential

The benefits of biomass technologies are impressive. Bioenergy, biofuels and associated products will be domestically produced and sustainable, in sharp contrast to our current reliance on imported fossil fuels, thereby enhancing our strategic security. This is particularly true given that biomass ethanol can be used as a transportation fuel in place of gasoline. Cellulosic biomass technologies will also diversify and strengthen rural economies by allowing farmers to utilize existing residues for high-value products and introducing new cash crops. This bill will help to develop American technological leadership in an emerging field with huge domestic and export market potential.

A particularly significant opportunity is the ability to reduce greenhouse gas emissions while at the same time providing these other benefits. The displacement of fossil fuel with biofuels can produce a dramatic reduction in overall carbon emissions, because many biomass sources can be obtained and used with essentially no net emissions of greenhouse gases. Quantifying the potential benefits is not easy, because it depends on which technologies are being used and being replaced, as well as the overall scale of biomass use. Nevertheless, the Energy Innovations study projected that biomass use could double or triple over the next 2 to 3 decades, and this increase could reduce US greenhouse gas emissions by roughly 10 to 20 percent.^⁽¹⁾

From a technical perspective, we believe that this bill identifies correctly the priority areas of research. Cellulosic biomass is a useful feedstock for biofuels for transportation applications and electricity production, and is likely to be the only non-fossil derived source of a range of important organic chemicals and other products. Whereas electricity can be produced from many different renewable energy resources, biomass can also be used as a feedstock to produce the many commodities essential to our quality of life in an industrialized economy. It is therefore critical to develop the ability to utilize the biomass resource to its highest potential.

Biomass resources can be obtained from residues from existing agricultural and other sources, as well as from dedicated crops of perennial grasses and woody crops. The use of existing, underutilized agricultural residues could be significant, able to provide roughly 2.5 Quads of energy or 3 percent of annual US primary energy use, and should be a clear priority for research.^{⁽²⁾ However, taking advantage of the full potential for biomass technologies will require the development of sustainable, dedicated biomass crop production and
processing techniques.}

^{Evaluation of Net Environmental Impacts}

^{NRDC strongly feels that we must carefully evaluate the net environmental impacts of the types of biomass-based technologies being promoted in this bill. Only
with a full understanding of the net impacts can appropriate decisions be made regarding long-term R&D priorities and deployment and commercialization of
biomass energy systems. We are encouraged to see that Senator Lugar, in his floor statement introducing the bill on April 30th, specifically endorsed the
concept of ensuring a net improvement in environmental quality.⁽³⁾ We urge that this concept be more strongly articulated in the bill before it is enacted.}

^{We believe that in general the environmental performance of biomass technologies is far superior to conventional, fossil-based energy and chemical production
systems. Nevertheless, some technologies are known to have specific negative environmental impacts in one or more areas. In most cases these negative
impacts may be outweighed by the positive, but in order to mitigate any negative consequences as much as possible and avoid unpleasant surprises we must
understand these potential impacts before committing ourselves to a particular technological path.}

^{To that end, there are two areas in which this bill as introduced could be strengthened. First, the activities for which grants, contracts and assistance can be
awarded under the Sustainable Fuels and Chemicals Research Initiative should be expanded to specifically include research on the negative and positive
environmental impacts of biomass technologies. This includes all aspects of particular technologies, not just the growth and harvesting of the biomass resource,
but also the processing of the biomass, and the use of the fuel or product.}

^{Second, the bill should specify that environmental benefits and impacts be included in the selection criteria for grants, contracts and assistance. Preference
should be given to those areas in which the net environmental impact is likely to be most positive, according to the best understanding of impacts at the time of
evaluation.}

^{Environmental Concerns.}

^{The main potential environmental impacts are in the areas of air pollution, full-lifecycle greenhouse gas emissions, land use pressures, and the use of genetically
modified organisms. The discussion here is not intended to be a comprehensive list of environmental concerns but rather an indication of the areas in which
additional research is warranted.}

^{Air Pollution}

^{We believe that, as a basic principle, increased use of biobased fuels and other products should not compromise the benefits of existing and future air pollution
standards, such as requirements for reducing gasoline volatility and reducing ozone ("smog"). Of particular concern are air toxics and ozone precursors from
combustion products, evaporation of the fuel itself, and subsequent chemical reactions in the atmosphere.}

^{Air Toxics}

^{The technologies that could emerge as a result of this bill may expand the use of ethanol in vehicle fuels. Ethanol is a familiar product, but it also poses health
concerns. Combustion products of ethanol include both formaldehyde and acetaldehyde, both known carcinogens. Increased use of ethanol may also increase
atmospheric levels of peroxyacetylnitrate (PAN).}

^{A 1998 University of California report on health effects of oxygenates, including ethanol, states, "Use of ethanol would result in increased atmospheric
concentrations of acetaldehyde and PAN. Acetaldehyde has been listed as a Toxic Air Contaminant in California based on evidence of carcinogenicity and while
PAN has not been tested for carcinogenicity, it is genotoxic [causes genetic damage] and produces respiratory and eye irritation and may produce lung damage."⁽⁴⁾ In a separate section these scientists reiterate, "The formation of formaldehyde, acetaldehyde and PAN in the atmosphere [from ethanol use] are matters of
considerable concern and represent one of our highest recommendations for future research."⁽⁵⁾}

^{Increased use of ethanol may also lead to an increase in ethanol exposure via inhalation. Studies of high level exposures to ethanol (virtually all studies of
ingestion rather than inhalation) demonstrate that ethanol increases a variety of adverse human health effects, ranging from developmental toxicity, central
nervous system dysfunction, teratogenicity (birth defects), reproductive disorders and cancer⁽⁶⁾. Some data suggest developmental toxicity even at low doses.⁽⁷⁾ Without further research we would be merely gambling that low-level, long-term ethanol exposure will not increase health hazards.}

^{Ozone Precursors}

^{Ozone is formed in sunlight from the chemical reaction of volatile organic compounds (VOCs) and nitrogen oxides (NOx). Biomass processing technologies and
biofuels use have the potential to increase emissions of ozone precursors. For example, gasification of biomass for power generation can in some cases increase
NOx emissions.⁽⁸⁾}

^{Ethanol increases the volatility of liquid fuels, increasing the atmospheric concentration of VOCs as well as some atmospheric air toxics. Of particular concern is
that commingling of ethanol and non-ethanol gasoline blends with marked increases in volatility. Strict limits on gasoline volatility must be enforced to ensure
that the use of biofuels does not degrade air quality. Furthermore, research should be conducted under this bill to ensure that biofuels mixtures does not have
other unanticipated environmental effects or affect vehicle emissions performance.}

^{Greenhouse Gas Emissions}

^{The use of biomass as a substitute for fossil fuel use does, to a first order of accuracy, result in a closed carbon cycle and presents the opportunity for significant
net reductions in greenhouse gas emissions. The full lifecycle must be examined, however. For example, current corn-based ethanol production requires
significant fossil fuel inputs for agricultural production and processing. Thus, NRDC would prefer to see grants under this bill targeted to technologies using
residues and low-input crops. As indicated above, the potential for a grant to lead to a reduction in full fuel cycle greenhouse gas emissions should be among the
selection criteria.}

^{Land Use Pressures and Biomass Production Impacts}

^{The large-scale use of biomass resources has the potential to generate incentives for undesirable land use and land management practices. The use of agricultural
and other residues from existing production is unlikely to have negative impacts because it does not require additional land (or additional harvesting in the case
of biomass from forests). However, production of dedicated biomass crops could at some point compete for agricultural land (or increase harvesting pressures on
forest land). Grants should ensure that the use of biomass resources does not contribute to socially undesirable land use pressures, or to management practices
that are unsustainable or environmentally damaging.}

^{For example, increased demand for wood and wood residue biomass resources could generate pressure for undesirable degradation and conversion of forest land.
Promoting technologies that would rely on the use of existing forests, especially old growth and other environmentally and biologically valuable forests, would
be catastrophic. Grants awarded under this bill for wood biomass should focus on the use of existing wood residues, for example from pre-commercial thinning;
harvesting and processing residues; and dedicated woody crops.}

^{Another important criteria for awarding grants is the sustainability and environmental impact of biomass production techniques. For example, pesticide,
fertilizer, and water use in corn production have substantial environmental impacts which could be reduced if ethanol were instead produced from crop residues
and dedicated crops with minimal pesticide and fertilizer inputs.}

^{Genetically Modified Organisms.}

^{The in-field use of genetically modified organisms is a highly controversial issue involving consumer welfare, agricultural economics, environmental and
biodiversity impacts, and international trade. Given the current uncertainty in its long term acceptability, NRDC believes that it is necessary to assess the specific
ecological impacts of research projects before any in-field use of genetically modified organisms. The development of new enzymes for biomass processing is
much less troubling because of their isolation from ecosystems.}

^{Municipal Solid Waste as a Biomass Source}

^{There is a clear environmental preference for reducing the amount of waste generated through source reduction and recycling. We view incineration, even with
energy outputs, as a method of last resort and one that can generate numerous other pollution concerns. Chemical and biological conversion of municipal solid
waste to produce biofuels and products may be more acceptable than combustion, but the primary goal of reducing solid waste generation in the first place
should not be overlooked in investigating the use of municipal solid waste as a biomass source.}

^Conclusion

^{In conclusion, NRDC believes that The National Sustainable Fuels and Chemicals Act of 1999 could play a vital role in moving the United States toward an
environmentally sustainable energy economy, and therefore endorses the bill and urges the Committee to move the bill forward. As indicated above, the bill
could be made stronger by more clearly including net environmental impacts as a research area and a grant criterion. This improvement would be fully
consistent with the intent of the bill. We thank the Chairman and members of the Committee for the opportunity to participate in this hearing today, and look
forward to providing the Committee with whatever assistance we can as it considers this bill.}

1. ^{1 Alliance to Save Energy, American Council for an Energy Efficient Economy, Natural Resources Defense Council, Tellus Institute, Union of Concerned Scientists,
Energy Innovations, June 1997, pp. 136.}

2. ^{2 President's Committee of Advisors on Science and Technology, Report to the President on Federal Energy and Research and Development for the Twenty First
Century, November 1997, pp.6-31.}

3. ^{3 Congressional Record, US Senate, S4505, April 30th, 1999.}

4. ^{4 Froines et al, "An Evaluation of the Scientific Peer-Reviewed Research and Literature on the Human Health Effects of MTBE, its Metabolites, Combustion Products
and Substitute Compounds," Report to the Legislature of the State of California, Volume II, Human Health Effects, November 1998, p. xix.}

5. ^{5 Froines et al, 1998, p. 179.}

6. ^{6 Froines et al, 1998, pp. 144-153, 179. Health Effects Institute. The Potential Health Effects of Oxygenates Added to Gasoline, A Review of the Current Literature. A
Special Report of the Institute's Oxygenates Evaluation Committee. April 1996.}

7. ^{7 Froines, op cit. p. 150-151.}

8. ^{8 President's Committee of Advisors on Science and Technology, Report to the President on Federal Energy and Research and Development for the Twenty First
Century, November 1997, pp.6-28.}