May 8, 2011
National Review

The television-news business has a great phrase: “happy talk.” On some occasions, TV producers ask their newsreaders to engage in some friendly banter — happy talk — to fill the airtime between news segments.

Unfortunately, when it comes to energy, Barack Obama is incapable of anything other than happy talk. For proof of that, read the transcript of the president’s weekly address, which he delivered on Saturday while visiting an Allison Transmissions plant in Indianapolis. Once again Obama trotted out the familiar tropes about how “clean energy” will “add jobs” and create the “jobs of the future.” In an address that contained just 642 words, Obama used the phrase “clean energy,” or a variant of it, seven times. He also repeated his desire to waste yet more money on the chimera of "advanced biofuels.”

The weekly address is the latest example of how the president’s positions on energy policy have gone from silly to totally incoherent. That incoherence was on display last month, when Obama sent a letter to congressional leaders asking them to “eliminate unwarranted tax breaks for the oil and gas industry, and to use those dollars to invest in clean energy to reduce our dependence on foreign oil.” The bogeyman of “foreign oil” appears three times in Obama’s two-page letter. And he insists that his approach, which aims to cut $4.4 billion in tax preferences for the oil-and-gas sector, will constitute an “energy policy that creates jobs and makes our country more secure.”

In that very same letter, Obama says that the U.S. should be "invest in everything from wind and solar to biofuels and natural gas.” Huh? The president wants to eliminate all subsidies for oil and gas drilling, but at the same time, he says we should be investing more in natural gas.

To be clear, I’m fully in favor of eliminating energy subsidies. All of them. Let all sources compete, fair field, no favor. And that stance is gaining traction, even among left-of-center energy activists. As Jerry Taylor of the libertarian Cato Institute recently pointed out, people “like Amory Lovins of the Rocky Mountain Institute, Carl Pope, executive chairman of the Sierra Club, and green energy investor Jeffrey Leonard, chairman of the Global Environment Fund, think the time is ripe to eliminate all energy subsidies in the tax code and let the best fuel win.”

Given the bipartisan support for cutting energy subsidies, why can’t Obama let go of the corn-ethanol swindle, the longest-running robbery of taxpayers in modern history? The president repeatedly derides the tax breaks given to the oil-and-gas sector. And yet that sum is a fraction of the scandalous amounts of money being diverted into the pockets of Big Ag.

Last year, the Congressional Budget Office reported that the cost to taxpayers of using corn ethanol to reduce gasoline consumption by one gallon is $1.78. This year, the corn-ethanol sector will produce about 13.8 billion gallons of ethanol, the energy equivalent of about 9.1 billion gallons of gasoline. Thus, the total cost to taxpayers this year for the ethanol boondoggle will be about $16.2 billion — nearly four times as great as the subsidies provided for oil and gas. And because the domestic-drilling sector provides about 36 times as much energy to the U.S. economy, the tax preferences given to corn ethanol are 130 times as great as those given to oil and gas per unit of energy produced. And yet Obama dares not mention cutting the ethanol scammers out of the congressional pork fest.

The corn-ethanol scam represents the worst of the worst when it comes to biofuels. And despite a mountain of evidence that shows the futility of large-scale biofuel production from other sources, Obama and many of his allies in Congress continue their happy talk about “advanced biofuels” and how that elixir will somehow heal all that ails America.

To be fair, Obama’s rhetoric on biofuels is nearly identical to that of his predecessor. In February 2007, George W. Bush visited an enzyme-production facility in North Carolina owned by a company called Novozymes and declared that “it’s an interesting time, isn’t it, when you’re able to say, we’re on the verge of some breakthroughs that will enable a pile of wood chips to become the raw materials for fuels that will run your car.” That same day, the White House put out a press release declaring that as “cellulosic ethanol production becomes commercially viable,” plants around the country will be able to use “grass from a prairie, wood chips from a forest, or agricultural waste like stalks — to create fuel.”

Four years ago, Congress was drinking from the same beaker of ethanol as Bush. In 2007, Congress passed the Energy Independence and Security Act, which mandated that a minimum of 16 billion gallons of cellulosic ethanol be blended into the U.S. auto-fuel mix by 2022.

But last year, the Environmental Protection Agency had to set aside the hype and acknowledge that commercial production of cellulosic ethanol remains insignificant. The result: The EPA drastically cut the targets set by Congress. Instead of 100 million gallons of cellulosic ethanol in 2010 and 250 million gallons in 2011, the EPA slashed the targets to just 6.5 million gallons for both years. And despite the tsunami of hype, there’s no reason to expect a major breakthrough in cellulosic-ethanol production any time soon.

Furthermore, even if there were a significant breakthrough in the process of converting switchgrass, wood waste, and other biomass into liquid fuel, the amount of biomass that would be needed to make a significant dent in our oil consumption boggles the mind. The reason: basic physics. Even the best-managed tree plantations can achieve power densities of only about one watt per square meter. For comparison, a marginal natural-gas well has a power density of about 28 watts per square meter.

The low power densities of biofuels means that huge quantities of material are needed. For example, replacing just 10 percent of U.S. oil needs with ethanol derived from switchgrass would require the annual production of about 425 million tons of biomass. Growing that much switchgrass would require some 36.9 million acres of land, or about 57,700 square miles. For comparison, that 36.9 million acres is equal to about 8 percent of all the cropland now under cultivation in the U.S.

That much cropland would nearly cover the entire state of Oklahoma. Now, some people probably believe that paving Oklahoma with switchgrass would be a major improvement. But even if that task were achievable, there’s still no infrastructure available to plant, harvest, and transport the switchgrass or other biomass source to the biorefinery.

Nevertheless, the Obama administration is providing hundreds of millions of dollars in loan guarantees to startup companies such as Coskata and Enerkem, which are claiming that they can produce cellulosic ethanol.

Unfortunately for taxpayers, those companies, and many others like them, are almost certainly doomed. We’ve already seen the bankruptcy of Cello Energy and the apparent failure of Range Fuels, both of which made absurd promises about their ability to turn waste products into fuel.

In a document released last November, the EPA complained about the difficulty of “projecting the volume of cellulosic biofuels that could be produced” over the coming months. The agency said that “announcements of new projects, changes in project plans, project delays and cancellations occur with great regularity.”

Unfortunately, Obama and his secretary of energy, Steven Chu, continue to inundate us with happy talk about energy in general and biofuels in particular. Last month, Chu, during an appearance at Dartmouth College, claimed the world is on the cusp of a “biofuels revolution.”

Here’s some advice: Don’t count on it.

— Robert Bryce is a senior fellow at the Manhattan Institute. His latest book, Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future, is now out in paperback.

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