Electric Vehicles Are as Inevitable as … Cellulosic Biofuels – Competitive Enterprise Institute

Americans are increasingly hearing the “I” word when it comes to electric vehicles—inevitability. Proponents insist that they make too much sense for consumers and the planet for it to be any other way. They add that the technology is already here and will only get better and cheaper over time, especially if properly incentivized by government mandates, subsidies, or both. And, as for those less enthusiastic about the future of electric vehicles and opposed to market interventionslike CEI—we are told that the critics cannot possibly have any legitimate doubts because there are none  and that they are merely part of a big oil conspiracy to kill off the competition for gasoline.

But it is worth noting that almost everything said today about the inevitability of electric vehicles was said several years ago about the inevitability of cellulosic biofuels.

Remember cellulosic biofuels? It is easy to forget, especially since the environmental groups that used to tout them scarcely mention them anymore. But prior to electric vehicles, they were the big green hope to displace a substantial amount of fossil fuels in the transportation sector.

The premise was that we could unlock the energy in the cellulose found in agricultural and wood waste materials that America possesses in great abundance, and thus use them instead of petroleum as the feedstock for liquid fuels. They would mostly take the form of cellulosic ethanol that could be added to the nation’s gasoline supply.

Cellulosic biofuels were heavily subsidized by the federal government, including a $1 per gallon tax credit. Even more significantly, the Renewable Fuel Standard (RFS) mandate, created by Congress in 2005 and greatly expanded in 2007, included cellulosic biofuels along with conventional “first generation” biofuels like ethanol from corn and biodiesel from soybeans or fats. Overall, the RFS mandated growing volumes of cellulosic and non-cellulosic biofuels, reaching 36 billion gallons of renewable fuels annually by 2022. Conventional corn ethanol could be no more than 15 billion gallons per year, while 16 billion (if available) was to be cellulosic. The RFS also required that cellulosic biofuels be at least 60 percent lower in lifecycle carbon emissions than an equivalent amount of gasoline in order to qualify.

While some thought the cellulosic targets were aggressive, others in the environmental activist community thought the potential was even greater. This included the Union of Concerned Scientists who said in 2014 that “cellulosic biofuel plants are being built across the country” that by 2030 could “generate 54 billion gallons of ethanol each year,” a significant chunk of the nation’s 130 billion gallon per year demand for gasoline. Anyone dissenting from the cellulosic optimism risked accusations of being in the pockets of big oil.

But five years later (2019 is the most recent year unaffected by COVID-19), the actual amount of cellulosic biofuels produced was closer to an inconsequential 10 million gallons. The proverbial “just around the corner” explosion of production never materialized, and all the massive government support has made little difference. The critics, who had long noted that the chemical process of making cellulosic biofuels was difficult and inefficient and not easy to be improved, and that mandates and subsidies cannot change these fundamental realities, turned out to be right. And all those who were so quick to proclaim cellulosic as the next big thing were flat-out wrong. Now, many of the same folks are saying the same about electric vehicles.

In truth, electric vehicles have at least as many technological and economic hurdles as cellulosic biofuels. The lessons from the cellulosic debacle should not be ignored.

Leave a Reply

Your email address will not be published. Required fields are marked *