Cellulosic Ethanol Continues to Fail

In 2007, President Bush signed the Energy Independence and Security Act. The bill amended the Renewable Fuel Standard and mandated that increasing amounts of cellulosic ethanol be blended with gasoline and diesel every year, with the provision that the Environmental Protection Agency (EPA) may reduce the mandated amounts. But year after year, the technological advances that President Bush and the Congress assumed would happen have not occurred and cellulosic ethanol production remains stuck in neutral.

Normal ethanol is made from the sugary or starchy plants of plants. For example, corn ethanol is made with corn kernels. But cellulosic ethanol is made from the rest of the corn plant—the corn stalks for example. While cellulosic ethanol sounds interesting in theory, in practice it is expensive and the ethanol industry cannot make very much of it, let alone the amounts mandated by the Renewable Fuel Standard.

For 2013, the Renewable Fuel Standard mandated that 1 billion gallons of ethanol be blended with fuel and in 2014, the law mandates that 1.75 billion gallons are blended with fuel. But actual production has met just a fraction of the mandate. In 2013, a total of 818,517 gallons of cellulosic ethanol were produced—a mere 0.082 percent of the Congressionally-mandated volumes.

Because the cellulosic ethanol producers have fallen so far short of producing the mandated amounts of ethanol, the EPA has been forced to reduce the mandate for every year so far including for 2013. EPA originally forecast that 6 million gallons of cellulosic ethanol would be produced in 2013—far more than the 800,000 gallons that were actually produced. This is just one example of how EPA’s forecast of cellulosic production have been notoriously inept with EPA year-after-year overestimating actual production.

For 2014, EPA forecast that a whopping 17 million gallons of cellulosic ethanol would be produced. Once again, EPA’s estimate is proving grossly incompetent. So far in 2014, the cellulosic ethanol producers are on track to produce a mere 307,292 gallons of cellulosic ethanol for the year, or only 2 percent the amount EPA forecast a few months ago. 

It is now seven years since Congress passed the cellulosic ethanol mandate and cellulosic ethanol producers are producing far, far less than is required by the law. EPA can reduce the amount required every year, but EPA does a terrible job of estimating actual cellulosic production. It’s about time EPA comes back to reality an only require as much cellulosic ethanol as was produced in the previous year instead of trying to forecast increased production.

This is just one more example of how Congress and bureaucrats do a poor job predicting the future. Hopefully, this Congress and future Congresses will look at the failure of cellulosic ethanol, despite massive mandates, and be much more circumspect about mandates in the future.

IER Director of Regulatory and State Affairs Daniel Simmons authored this post.