March 23, 2010 | General

Biomass Energy Outlook: Oil Consumption And The Green Economy

BioCycle March 2010, Vol. 51, No. 3, p. 60
Mark Jenner

Last month, lower than expected consumption of distillate fuel was linked to delays in the economic rebound. Distillate fuels include diesel fuel and heating oil. Its consumption has been declining since a record high in 2007. Furthermore, the decline in transportation fuel consumption translates into a reduction in carbon emissions.
On the surface, the economic slowdown appears to produce a beneficial emissions reduction value. In this case the benefits do not outweigh the cost of the slow economy. Fewer shipments may require less fuel and lower greenhouse gas (GHG) emissions, but we can not have sustainable environmental gains without economic growth.
Jim Williams and other energy economists link this slow down in the economy to less shipping in the U.S., but they also indicate that the economy will likely recover without distillate consumption ever going back to the 2007 levels. Changes in fuel policies, newer technologies, new fuels (including biofuels), and a severe aversion to $4/gallon fuel prices will help move the U.S. addiction to oil to a lower level of fuel consumption. Reduced emissions with economic growth will be great news.

In December, the U.S. Department of Energy’s Energy Information Administration (EIA) released its Emissions of Greenhouse Gases in the United States 2008 report. The U.S. GHG emissions declined from 7,209.8 million metric tons of carbon dioxide equivalent (CO2-eq.) in 2007, to 7,052.6 million metric tons in 2008 (a 2 percent reduction). However, it is the lowest level of emissions since 2004 and only 0.6 percent higher than the emissions level of 2000 (7009.8 million metric tons CO2-eq). This report indicates that GHG emissions in the U.S. leveled off long before the current recession began, providing reasons to get excited about reductions of GHG emissions and economic growth.
According to EIA, 81 percent of GHG emissions in the U.S. are carbon dioxide, 11 percent are methane, 4 percent are nitrous oxide, and the rest are complex compounds with very high global warming potential. Since 2000, the high-volume CO2 emissions appear to be declining. In 2008, CO2 emissions declined by 178 million metric tons – the largest decline since 1990, but the third annual decline since 2000.
While residential CO2 emissions have increased since 1990, increases in population growth have been largely offset by gains in appliance efficiency. Commercial sector CO2 emissions have increased directly since 1990 with increases in per-capita income. The commercial sector includes retail and office buildings, schools, hospitals and restaurants. There were notable decreases in coal and petroleum consumption and emissions, however these were overshadowed by much larger increases in emissions from natural gas and electricity use.
In the industrial/manufacturing sector, the 1,589.1 million metric tons of CO2 emissions in 2008 are lower than the 1990 CO2 emission levels of 1,689.5 million metric tons – a 6 percent decline. EIA reports that the U.S. industrial sector has moved away from energy-intensive manufacturing to less intensive industries such as electronics and computers. This positive GHG news may actually be the result of simply exporting the more damaging industries to other countries, rather than making significant gains in economically sustainable benefits.
Most of the GHG emission increases have come from the smaller volumes of methane, nitrous oxide, and other GHG with greater global warming potential. Keep in mind though that the emissions data – while very sophisticated – is all constructed from other datasets. A small change in this data creation methodology can create a large change in the calculated results.

Current economic indicators provide reliable information about what is going on at the moment. The better news is that energy economic indicators of the future have yet to be determined. The GHG numbers reported by the EIA are based on the Intergovernmental Panel on Climate Change (IPCC) methodologies. These will likely change as we learn to quantify GHG measurements more accurately. Right now these are the best tools we have.
In February, the U.S. EPA adapted new information on biofuels and international land use impacts into its final version of the revised regulations on the renewable fuel standards. The new knowledge enabled EPA to relax the more rigid, conservative starting point from the earlier draft regulation. To realize the economic benefits from green industry growth, biomass policies must integrate new information as it becomes available.
A successful transition to a bioeconomy will require innovations in policy to dovetail with new conversion technologies and distributed business models. Treatment of regulated wastes is moving from traditional remediation to the profitable conversion of biomass into composts, fuels, and industrial products. These new green business models will create wealth as they recycle organic wastes back into local economies, and will not require as many miles in shipping and transportation.
As 2010 begins, the reduction in distillate fuel is still a reliable indicator of a slow economy. But as technologies and market infrastructure increase for locally grown biomass products, new economic indicators will be developed. These future indicators of the green economy will decouple low carbon fuel consumption from carbon dioxide emissions. We will find ways to have necessary energy consumption, economic growth and lower GHG emissions.

Mark Jenner, PhD, and Biomass Rules, LLC has joined the California Biomass Collaborative. Burning Bio News and other biomass information is available at

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