Yet in the space of a few years, as US biofuel production has soared to over five billion gallons a year (a figure that is expected to double by 2009), more and more concerns about the environmental impacts of biofuels have been raised. These environmental concerns range from pesticide and water use associated with feedstock production to the potential for slightly higher emissions of some air pollutants. This report makes the case that biofuels can and must be produced – from “field to wheel” – with environmentally and socially sound practices.

Oregon is particularly well-suited to benefit from developing a renewable fuel industry. Oregon’s diverse agricultural industry and strong environmental policy framework make it uniquely placed to become a leader in the development of sustainable biofuels.

Oregon has the potential to produce renewable fuels locally to replace a small, but not insignificant, portion of its petroleum use in the near-term , and production is expected to expand significantly as cellulosic ethanol and other advanced biofuels become cost-effective to produce. Unlike dollars spent on gasoline or diesel, money spent on locally produced biofuels will circulate in local communities, boosting Oregon’s economy. Developing a renewable fuels and biomass energy industry will also create new markets for Oregon farm and forest products.

Perhaps most critically, if renewable fuels are produced sustainably, they can generate substantial reductions in greenhouse gas emissions and improvements in air and water quality. The converse is also true – if farmers, foresters and biofuels processors use unsustainable practices, we will end up with fuels that harm, not help, our environment.

Biofuels: An Arrow in the Quiver

Reducing the overall demand for oil by increasing the energy efficiency of our economy and finding new ways to conserve energy should be the nation’s and Oregon’s first priority. To meet the remaining demand for oil and help fight global warming, sustainably produced renewable fuels also play a key role.

Transportation’s important transition away from oil also includes more fuel-efficient conventional vehicles, hybrids, plug-in hybrids, electric and other alternative fuel vehicles in the near-term and perhaps hydrogen fuel cell vehicles in the long-term.

Oregon’s Potential for Renewable Fuels

Oregon has very different potential for what are known as first-generation and second-generation biofuels. First-generation biofuels, including ethanol and biodiesel, are those that are produced from food crops. Second-generation biofuels are those that can be produced from inedible cellulosic crops like wheat straw or wood. Second-generation biofuels are expected to become commercially viable over the next five to ten years, although technological breakthroughs could speed this up.

Oregon has substantial potential for an expansion of oilseed production, which could produce 25-50 million gallons of biodiesel a year, around 3-6% of Oregon’s diesel consumption . While canola is the main crop being considered as a biodiesel feedstock, developing drought-resistant crops, such as camelina, for use in Eastern Oregon will help expand feedstock production.

After selling into food markets, wheat farmers could direct a good portion of Oregon’s large wheat crop to first-generation ethanol production. Smaller quantities of ethanol could also be produced from sugar beets, potatoes, and whey and other agricultural byproducts if it proves economical to construct the plants and infrastructure to do so.

In terms of second-generation biofuels, Oregon’s largest potential feedstock is wheat straw and other agricultural residues. However, determining how much residue needs to be left on the field to prevent erosion and preserve fertility is a critical question.  Woody biomass, such as forest thinnings, can also be used to produce biofuels, but it is logistically challenging to remove and transport and would have to be done in such a way that improves, rather than impairs, forest health. Finally, hybrid poplar and other short-rotation woody crops may be an important feedstock in the mid-term, although the limited availability of water for irrigation in Eastern Oregon may be an issue. In the long-term, one of the most promising biofuels feedstocks may be algae, although much research remains to be done to prove its feasibility.

1.1 Producing Renewable Fuels Sustainably

While renewable fuels are often referred to as “carbon-neutral,” this is not quite the case. Although the carbon released when biofuels are burned is the same carbon that was captured by the plant as it grew, agricultural production – particularly through the use of chemical fertilizers – can produce substantial greenhouse gases (GHGs). Bringing new land into agriculture also accelerates global warming because the destruction of forests and grasslands releases large quantities of carbon dioxide and other GHGs within a very short period that had been sequestered in the plants and the soil over decades. Converting carbon-rich natural ecosystems to agricultural land for production of biofuels feedstocks diminishes any value the fuels might have in fighting global warming. Likewise, when biofuels production relies on fossil fuels like coal and natural gas to power the processing plants, the global warming benefits of biofuels decline.

To produce sustainable biofuels, it is important to evaluate the entire biofuels production process, from the fields where the feedstock is planted, through the processing plant, all the way to the tank. Based on this life-cycle analysis, those renewable fuels that provide the highest energy yield, most positive local economic and social impacts, greatest benefit to the environment, and lowest drain on scarce resources should be clearly identified and encouraged.

This report outlines the environmental implications of producing biofuels, both positive and negative, and provides recommendations that will put Oregon at the forefront of sustainable biofuels production.

Some members of the renewable fuels industry question whether they should be held to higher standards than the petroleum industry, particularly when they are just getting off the ground. We propose that there is not only a moral imperative to protect the environment, slow global warming and improve the public’s health, but that sustainable biofuels practices make sense from an economic standpoint. Consumers are increasingly demanding sustainably produced products; and citizens are increasingly demanding that government policy support sustainability. Whenever public funds are used to support expansion of an industry on the premise that that industry is providing a public benefit (in the case of biofuels a climate-friendly, environmentally sustainable, and local industry), the industry should meet these goals or government should withdraw its support.

At the 2007 annual Leadership Summit of the Oregon Business Council, much attention was drawn to Oregon’s competitive advantage in sustainability, and the biofuels industry was identified as a key growth opportunity for the state. After years of relying on imported fuel, renewable fuels offer the possibility of locally produced, locally consumed energy, which puts money back into the community and, if done right, helps rejuvenate rather then damage the environment. Biofuels are just the beginning. New technologies allowing a full range of bio-products to be produced can help reduce our use of polluting chemicals and reduce the amount of non-biodegradable trash we produce. By encouraging a sustainable biofuels industry today, Oregon can be at the vanguard of an entirely new global economy tomorrow.

The Environmental Impacts of Oil

Oil has provided many benefits since significant deposits were discovered in the 19th Century, but every stage in its life cycle, from exploration to use, has harmful effects on our health and the environmental systems on which we and other species depend. A few are outlined below:

• Drilling and extracting oil results in spills and fires, occupational injury and disease, and harm to ecosystems. As one example, offshore oil rigs along the Gulf Coast have contaminated sediments and fish with mercury at levels far exceeding what is considered safe for human consumption .

• Oil leaks and spills cause serious harm to marine life and fisheries. According to the Oil Spill Intelligence Report of 1999, approximately 32 million gallons of oil was spilled in worldwide waters as a result of 257 transport incidents that year3.
• Petroleum refineries present major health hazards for those who work in and live near them; oil, its byproducts and the chemicals used in the refining process cause air and water pollution, thermal and noise pollution.
• Combustion of gasoline and diesel releases a variety of air pollutants that can lead to heart and lung disease, cancer and premature death. Combustion of gasoline and diesel also releases embedded carbon which combines with oxygen in the air to produce carbon dioxide, CO2, the most prolific greenhouse gas in our atmosphere. As levels of CO2 rise, the world warms, bringing a host of unwanted effects.