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Biofuel Furor

Will power plants get caught in ethanol’s food fight?

Fortnightly Magazine - August 2008

to comply with the RPS would require almost a 13-fold increase in non-hydropower renewable generation levels from 2005 levels by 2025. Similarly, the amount of ethanol and biodiesel needed to comply with the RFS would require more than a 12-fold increase from 2005 levels.

EIA said compliance with the twin 25-by-25 mandates would require successful development and rapid deployment of new technologies, such as biomass gasification power plants and cellulosic ethanol plants that currently are not commercially available. It says that costly hurdles could arise—such as resistance to siting of new plants, higher-than-expected transmission interconnection costs, and fuel supply limits—all holding back development and deployment of renewable energy technologies.

Large increases in bioenergy production, from corn and other energy crops, could have significant impacts on agricultural markets and put upward pressure on food and feed prices worldwide, according to EIA. In addition to technological uncertainties, the policy case implies structural changes in the U.S. economy that don’t necessarily follow from aggregate impacts on economic health or energy prices. If EIA’s analysis is correct, then growing dependence on renewables would bring higher electric and food bills to U.S. consumers, particularly in 2025 and beyond.