Study: U.S. not meeting renewable fuel goals

High oil prices have people looking at alternative energy sources such as biofuels, wind and solar as a solution to global fossil fuel dependency.

But according to a new RAND Corp. study, the United States has a long way to go in developing the necessary renewable energy technology. If the country desires to produce 25 percent of its electricity and motor vehicle fuel from renewable sources by 2025 without significantly increasing consumer costs, additional progress is necessary, according to the study.

The study found that biomass resources and wind power have the greatest potential to contribute toward reaching the 25x'25 goal.

The RAND study considered technological and economic factors that would affect the costs of renewable energy, as well as non-renewable fossil fuels.

According to the U.S. Energy Information Administration (EIA), average world oil prices in every year since 2003 have been higher than the average for the previous year. Also, prices in 2007 were nearly double the 2003 prices in real terms. Oil prices have increased nearly 100 percent over the past year.

EIA reported that world-marketed energy consumption is projected to grow by 50 percent between 2005 and 2030.

Recently the National Intelligence Council (NIC) completed a new classified assessment that said climate change could threaten U.S. security in the next 20 years by causing political instability, mass movements of refugees, terrorism or conflicts over water and other resources in specific countries.

Also, according to the Earth Policy Institute, global carbon dioxide (CO2) emissions from the burning of fossil fuels stood at a record 8.38 gigatons of carbon (GtC) in 2006, 20 percent above the level in 2000. Emissions grew by 3.1 percent a year between 2000 and 2006, more than twice the rate of growth during the 1990s.

According to the RAND study, substituting renewable energy for fossil fuels would reduce carbon dioxide emissions, the most prevalent greenhouse gas associated with global warming.

Currently, renewable energy provides 9.5 percent of total U.S. electricity supply, mostly hydroelectric power, and 1.6 percent of motor vehicle fuel.

"Expanding the use of renewable fuels will lower the long-term price of crude oil and reduce carbon dioxide emissions that are contributing to global warming," said lead author Michael Toman, director of the RAND Environment, Energy and Economic Development program. "However, to reap these benefits will require a major investment in improving and increasing renewable energy technology."

Toman said wind power, solar power, hydropower and the burning of agricultural waste are all examples of renewable energy sources that can be used to produce electricity. Biomass resources like stalks from food crops, wood material and grasses also can be turned into ethanol or gasoline to power motor vehicles.

The ethanol industry is currently under attack for contributing to rising food costs. All U.S. ethanol is manufactured from corn and there are now calls for Congress to cut the Renewable Fuel Standard's mandate because the quantity of this year's corn crop is being threatened by floods and other weather problems. Demand has pushed corn prices above $7 per bushel.

The study found that a large, inexpensive and easily converted biomass supply is essential if it is to be used as a renewable resource and still have a limited impact on consumers' wallets. Developing such a supply, according to the study, would require harvesting energy crops at a scale that greatly exceeds current production.

"Without increased biomass availability, expanded renewable energy use could impose economic burdens and result in environmental setbacks due to land conversion," Toman said.

While having 25 percent of this nation's fuel supply come from renewable sources by 2025  would significantly reduce carbon dioxide emissions, Toman said a broader package of policy options that includes, but does not rely solely upon, increased use of renewable energy could produce equal benefits with less cost.

Among the study's other key findings:

-- Renewable energy technology will have to improve at the very significant pace envisioned by some renewable energy supporters in order to enjoy low-cost impacts.

-- Significant increases in the use of wind power are possible, but only with substantial technical advances to facilitate greater use of less-productive locations.

-- More moderate renewable energy targets, such as 15 or 20 percent, reduce expenditure impacts more than proportionately, though carbon dioxide reductions also are less significant.

-- The federal government's policy approach to pricing of renewable motor fuels will significantly affect fuel demand and society's total energy expenditures.

"In particular, passing the cost of more-expensive renewable fuels to gas pump prices will result in improved energy efficiency, though it will cost consumers more," Toman said. "Subsidizing more expensive fuels will save people money at the pump, but only because the expense is shifted to the federal budget.”