NACEPT
Shaping the Nation's Environmental Policy
National Advisory Council for Environmental Policy and Technology
November 19,2007
Administrator Stephen L. Johnson
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, DC 20460
Re: Expanding EPA's Stewardship Role in Biofuel Development
Dear Administrator Johnson:
NACEPT members are appreciative for the serious consideration that you and the Agency are
giving to the two advice letters we have already provided on the development of renewable fuels.
We want to express our appreciation for the rapid evolution of the biofuels program within EPA,
particularly the excellent work EPA is doing in providing leadership on environmental issues in
the interagency Biomass R&D Board, in developing the Renewable Fuel Standard, in adopting
and promoting the biofuels supply chain as a framework for analysis and planning, and in
working to develop a coordinated, participatory way for the entire Agency to engage in this
burgeoning national effort. Your letter of September 26 to us is a strong and positive one, and
we wish you much success in all these efforts.
In today's letter, we wish to place particular emphasis on the large scale and almost breakneck
pace of the national effort to develop a biofuels industry able to meet the expectations of both the
executive and legislative branches and respond to the recent decision of the Supreme Court
regarding greenhouse gases. An effort of this magnitude is bound to generate a polarization
between what John Gartner characterized as "uncritical lovers" and "unloving critics." A key
challenge for EPA in this national effort is to rise above this polarization and help all parties
understand that the impacts of this unprecedented initiative will depend on the quality of the
effort to ensure that the biofuels industry is developed in a sustainable manner.
NACEPT members believe that the nation has the capacity to create a biofuel system that can
help meet energy needs over the generations ahead without degrading the natural resources of
soil and water required for continuing productivity and without unacceptable impacts on the
environment, human health, and the well-being of any parts of our population. But this outcome
will not be automatic, or easy, or inexpensive. It will require a dedicated, long-term effort in
which "doing it sustainably" achieves equal priority to meeting production goals. The Agency's
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shorter-term rulemaking efforts will take a first step towards sustainability by characterizing the
life cycle impacts of the industry, but achieving a fuller understanding of the requirements for
building a truly sustainable biofuels industry will be a longer-term effort. EPA will need to be
prepared to take further actions over time in the light of continued learning.
The stakes are high because the costs of "doing it unsustainably" could be very large. A
generation from now, the rapid expansion of biomass and biofuel production may look unwise,
or worse, unethical, if it is done in a way that leads to depleted aquifers and polluted water
supplies, reduced soil quality and land productivity, high food prices and more undernourished
people, and a boom-and-bust cycle of unsustainable growth that discourages further investment.
The current effort to transition our energy economy from hydrocarbons to carbohydrates will
deliver its full promise only if we remain mindful of the essential truth that renewability is not
synonymous with sustainability. How we answer the questions of what, where, and how
biomass is grown, processed, and delivered will determine whether the effort meets its potential
of becoming an environmentally and economically sustainable solution.
NACEPT members believe that providing the leadership needed to steer biomass and biofuel
development on a sustainable path will require EPA to go well beyond its strictly mandated
regulatory roles and develop a wide range of stewardship initiatives that encourage all parties
involved with the biofuels industry to take active responsibility for improving environmental
quality and achieving sustainable results. Under your leadership, the Agency is increasingly
incorporating stewardship strategies into its programs and activities. The effort you have
initiated to create an integrated, collaborative, multimedia Biofuels Strategy provides an
opportunity for EPA to utilize virtually the entire set of stewardship strategies at its disposal,
including partnerships, research, technology development assistance, information provision, and
collaborative problem-solving.
Below are several examples of the kinds of stewardship activities that EPA could undertake or
do on a larger scale. They are presented in logical categories (e.g., research, commercialization
assistance, public information) rather than in any priority order. Please share these examples and
recommendations with the work group you have created to develop an Agency-wide Biofuels
Strategy.
Accelerate Research on Impacts of Expanding Biomass and Biofuels Production and the
Sustainability of the Industry
As you know, EPA already has identified several important areas for research on the impacts of
expanded biomass and biofuel production on natural resources and human health. To accurately
assess these impacts, it will be necessary to establish baseline data in key areas such as water
availability, water quality, soil quality, land use changes, and the implications of changing land
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uses for the provision of ecological services. Building upon the baseline data, EPA and other
agencies will then be able to develop a set of sustainability indicators to identify the extent that
the conditions being monitored are changing. The regular data collection needed to produce
useful indicators will be a major step forward in assessing environmental conditions. The
challenge of developing sustainability indicators for biomass and biofuel production can be a
spur to making improvements in the nation's system for gathering environmental data. The
resulting information will be useful for a variety of other purposes.
Recommended EPA Actions
• Further elevate research on the impacts of biomass and biofuels production and the
sustainability of the industry as a major priority within the Office of Research and
Development, and encourage greater coordination between ORD and relevant research
efforts across the Agency.
• Develop an even more robust in-house capacity for carrying out sophisticated life cycle
analyses (LCA) and building national and regional decision support tools, such as the
Office of Research and Development's and Region 7's Future Mid-western Landscape
Study on the impact of biofuels on ecosystem services.
• Help catalyze intergovernmental research efforts to improve baseline data needed for
assessing impacts of biofuels and other energy technologies. For example, a September
2007 report from the President's Office of Science and Technology Policy (OSTP) on A
Strategy for U.S. Science and Technology Policy to Support Water Availability and
Quality in the United States concludes that "simply stated, quantitative knowledge of
U.S. water supply is currently inadequate." The report proposes a comprehensive science
and technology research strategy to address the water challenges facing the nation.
Participation in an effort of this nature would give EPA a basis for assessing many other
environmental impacts and for gauging progress toward meeting several goals in the
Agency's strategic plan.
• Building from a better understanding of the baseline state of the environment, work with
other agencies to develop a comprehensive set of sustainability indicators.
• Accelerate efforts within the Office of Prevention, Pesticides, and Toxic Substances to
evaluate and register bio-pesticides and bio-based fertilizers to augment or replace
traditional chemical pesticides and petrochemical-based fertilizers. Work to identify the
best application approaches for mitigating the serious impacts that the rapid expansion of
biofuel production could have on water quality.
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Collaborate on research to clarify best methods for maintaining and building soil and
mitigating nutrient runoff in areas where intensive biomass production is taking place.
Use existing alliances between Regional programs, the Office of Research and
Development, Office of Water, and USDA, such as the National Water Program, Gulf
Hypoxia Task Force, Chesapeake Bay Program Memorandum of Understanding, and
EPA/USDA Animal Feeding Operations Environmental Research and Technology
Transfer Committee.
Provide More Public Information on Biomass and Biofuel Impacts and Sustainability
EPA can play an essential role by providing the public, public officials, and the business
community with objective analysis and accurate, understandable information. To be effective in
this role, the Agency needs to maintain and strengthen its reputation for scientific rigor, honesty,
and transparency.
Recommended EPA Actions
• Clearly present the facts if there are aspects of the federal government's initiative to
accelerate the production of renewable fuels that research shows are producing
unsustainable impacts.
• Work collaboratively with the investment community. Financial markets can function
well only when investors have the information they need to assess risks and make
judgments about who will most productively use their capital. No organization is better
qualified than EPA to provide information that investors would find highly useful on the
practices and processes that appear most problematic or beneficial from the perspective
of impacts on natural resources, environmental quality, and human health.
• Work with other groups, like the 25 x 25 Initiative, that are forming sustainability and
stewardship working groups or task forces to promote the environmental integrity of the
biomass industry. (The "25 x 25" effort is a partnership initiated in the agricultural and
forestry sectors to forge consensus on providing 25 percent of the total energy consumed
in the U.S. from renewable sources by 2025.) The efforts of different groups are likely to
overlap considerably, such as work to define the basic principles of sustainability and the
metrics to measure it. By developing a relationship with these groups and their activities,
EPA can learn from them as well as help them to influence the industry's development.
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Help Facilitate the Commercialization of Biofuel-Related Technologies
NACEPT's Subcommittee on Environmental Technology has recently produced two reports that
review the wide range of programs and other means available to EPA for facilitating promising
technologies through a development continuum toward commercialization and use. These tools
need to be used to accelerate the development of promising biofuel-related technologies.
Recommended EPA Actions
• Utilize the full range of tools at EPA's disposal for facilitating promising biofuel
technologies, including:
S State grants in all EPA programs (e.g., Air, Water, Waste, and Pesticides), for
projects related to all the Agency's renewable fuel goals;
S Tribal grant programs, including Performance Partnership Grants and Direct
Implementation Tribal Cooperative Agreements;
S Office of Research and Development Small Business Innovation Research (SBIR)
grants to small businesses for bench and pilot-scale investigations;
•S Research grants to "on the edge" investigations that are risky but would have very
large payoffs if successful, through the Office of Research and Development's
Science to Achieve Results (STAR) program and the National Environmental
Technology Competition (NETC)',
^ Funding of larger demonstrations, jointly with other agencies, through such things as
State program grants, the Environmental Technology Council's Regional
Environmental Technology Council (RETAN), and the Collaborative Science and
Technology Network for Sustainability, (CNS);
^ Using the Regional Environmental Technology Advocacy Network (RETAN) under
EPA's Environmental Technology Council to identify, share, and implement
opportunities to use technologies that will ensure sustainable biofuels feedstock,
production, distribution, and use;
•S Using the Office of Research and Development's Environmental Technology
Verification Program (ETV) to verify the environmental performance of commercial-
ready technologies to assess their efficacy and cost so they will be seriously
considered in the marketplace, and help facilitate permitting of new environmentally
beneficial innovative technologies;
v' Replicating models such as EPA New England's Center for Environmental Industry
and Technology (CEIT) nationally or within other regions to encourage collaborative
technology development and use;
S Program, Regional and multi-state permit and compliance assistance for new
environmentally beneficial technologies; and
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S Readily available, reliable information on new, cost-effective technologies through
programs such as EPA's Environmental Technologies Opportunity Portal, the
Environmental Technology Council's Regional Environmental Technology Advocacy
Network (RETAN), EPA New England's Center for Environmental Industry and
Technology, and Regions 6 and 7's Blue Skies Collaborative.
• Focus many of these stewardship activities on the development of crop-to-fuel
conversion technologies, waste-to-energy technologies, and the comparatively neglected
area of developing new types of biofuels with superior cost-performance and
environmental characteristics.
• Consult with the oil industry to insure that EPA's biofuel-related efforts are done with an
understanding of their potential impacts on the existing industry. Rapid expansion of the
biofuels market depends on cooperation between the oil and biofuel industries to
minimize conflicts and uncertainties.
• Consolidate NEPA reviews and other government information on experience in
constructing cellulosic ethanol plants and other biorefmeries and make it available to help
industry avoid problems and speed the replication of successes. While this information
will all be site-specific, generic aspects may apply that could reduce the administrative
burden. EPA's regions could use this information to support both DOE and USD A in
their efforts to assist industry.
• Explore the technical and environmental feasibility of allowing use of higher ethanol
blends, such as E-30 and E-50, working collaboratively with the oil, auto, and ethanol
industries. EPA, along with industry and other federal agencies, will need to assure the
technical and environmental feasibility of using higher blends. If it proves possible to
permit drivers of non-flexible fuel vehicles to use higher blends with low-cost, EPA-
approved modifications to engines, and with appropriate modifications to assure the
safety of distribution infrastructures and dispensing technologies, the market for ethanol
could expand rapidly.
Provide Economic and Scenario Analyses to Inform Public and Private Sector Decision
Making
Assuring that biofuel development follows a sustainable path requires attention to economic
sustainability as well as environmental sustainability. Therefore, EPA needs to help engage the
federal family in looking at economic aspects of sustainability. Whether or not it may sometimes
be appropriate for EPA to weigh in on subsidies and other policy issues, NACEPT members
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believe it is clearly appropriate for the Agency's economics modelers (such as the National
Center for Environmental Economics, the Office of Research and Development's Regional
MARKAL modelers, and economic analyses within the Office of Air and Radiation, Office of
Water, and the Office of Solid Waste) to do cost-benefit analyses to inform decision-making.
Recommended EPA Actions
• Hold internal discussions among the Agency's leadership in the near future about the
kind of cost-benefit, economic-environmental analyses that would be appropriate and
useful for EPA to undertake in this area, optimizing the use of expertise within program
offices, the Office of Research and Development, and the National Center for
Environmental Economics.
• We recommend using decision support tools, such as the Office of Research and
Development's Regional MARKAL model, to forecast the economic and environmental
impacts of alternative biofuel development paths using specific regional inputs. For
example, as part of its responsibility for water quality in the Midwest, EPA could help
develop estimates of the potential consequences of different levels of increased corn
planting for biofuels. Areas for analysis and forecasting could include water availability
and quality, soil quality and erosion, greenhouse gas emissions and air impacts, food
prices, potential environmental justice issues, land use changes, and the impacts of these
changes on the provision of ecosystem services.
• We recommended conducting cost-benefit analyses of alternative cellulosic conversion
plant configurations (e.g., centralized vs. distributed processing). Conversion plant
location, distribution of these plants in rural America, and size will significantly affect a
wide range of logistic and environmental factors, including transportation
volumes/distances, volumes of spatial water extraction/use, economics, energy and
carbon balance, and types of feedstock that may be produced.
Provide the Workforce, Resources, and Planning to Do the Job Right
The accelerating pace of biomass and biofuel development is forcing EPA to take on added
responsibilities (such as promulgating the Renewable Fuel Standard and developing the
Alternative Fuel Standard rulemaking), use every tool at its disposal, and do all this quickly.
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Recommended EPA Actions
• Initiate discussions with the Office of the Chief Financial Officer (OCFO) about the
implications of the Agency's biofuels initiative for EPA strategic planning. At the least,
biofuels issues are sufficiently important to rise to the level of strategic targets to be
included in the next revision of the Strategic Plan. Beyond that, the integrated,
collaborative, multi-media Biofuels Strategy being developed within the Agency under
your leadership may serve as a model for how EPA can plan and organize for dealing
with other environmental issues and areas of energy development, as recommended in
our first advice letter.
• Carefully consider the workload being placed on key EPA staff for developing a
proposed rule on Alternative Fuel Standards, and supply additional staff where it is most
essential to provide comprehensive analyses and data to support this rulemaking.
• Distribute the workload more widely, relying on air, water, waste, and pesticides experts,
and gaining access to baseline environmental data and models throughout EPA to help
analyze the impact of biofuels production.
• Encourage voluntary programs throughout EPA to identify ways in which they can assist
the development of an environmentally sound biofuels industry while protecting the
health and well-being of all citizens of our nation.
• Keep encouraging the kind of internal dialogue that is beginning as a result of your recent
request to develop an EPA-wide Biofuels Strategy. This cross-agency, multi-media
dialogue is needed for developing an effective strategy that integrates across programs
and utilizes the full range of tools and expertise available to the Agency. Integrated,
participatory, sustainability-focused, Agency-wide planning is the key to both
maximizing the Agency's resources and reducing risks to the environment.
Administrator Johnson, your National Advisory Council on Environmental Policy and
Technology believes that assisting the biofuels industry to develop in a sustainable manner will
be a stringent test of EPA's leadership within the federal family, within the environmental
community, and within the energy industry. Shepherding the initiatives that you already have
begun in this area will be daunting; facilitating and focusing the efforts of the several federal
departments and agencies will be difficult; maintaining EPA's reputation for integrity while
managing expectations will need to be artful and open; and helping the rapidly growing biofuels
industry and the mature petroleum industry to understand and appreciate their necessary
interdependence will be extremely important in making the entire undertaking feasible. As
always, we stand ready to do whatever we can to help.
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Sincerely,
/Signed/
John L. Howard, Jr.
Chair
cc: Frank Stewart, Working Group Co-Chair
Bob Olson, Working Group Co-Chair
Marcus Peacock, Deputy Administrator
Charles Ingebretson, Chief of Staff
Ray Spears, Deputy Chief of Staff
George Gray, Assistant Administrator, Office of Research and Development
Robert Meyers, Acting Assistant Administrator, Office of Air and Radiation
John Askew, Region 7 Administrator
Jon Scholl, Agricultural Advisor
Rafael DeLeon, Director, Office of Cooperative Environmental Management
Sonia Altieri, NACEPT Designated Federal Officer
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