BP and Shell both proudly proclaim their dedication to the production of biofuels in the ongoing fight for the environment. It is understandable why these two petroleum giants would want to be seen to be seeking out alternative fuel sources, at a time when the mere mention of fossil fuels is programmed to stir up notions of harm and detriment. In fact petroleum companies the world over have perhaps the poorest image they have ever had, when one considers that we are at the height of our climate fears, coupled with the public relations disaster of the BP oil spill in the Gulf of Mexico two years ago.
Big Oil, now so synonymous with environmental damage, wants to improve its reputation through advertising such as Shell's “Let's Go” campaign. What such advertising fails to mention is the growing controversy over what Shell and other companies claim about their biofuel products. In fact, the true nature of the relationship between biofuels and the environment turns out to be anything but transparent.
First, a preamble. The major concept behind biofuels is that fuel can be derived from organic matter either by being fermented into ethanol, to produce liquid fuel, or by extracting natural oils, which are then blended with petroleum to produce products such as biodiesel. The main effort of course is to reduce the use of straight petroleum, and thereby reduce our impact upon the environment; at least, that is the driving intention. But things soon get complicated.
One aspect veiled by Big Oil’s commercials is that there is no single biofuel product, but rather a banner under which several “generations” of fuels emerge. To put it simply, the key players at the moment are first and second-generation biofuels, of which the first-generation is ethanol-based fuel (the fermentation method) and the second generation is that of non-food crops, creating what is known as ‘cellulosic ethanol’. First-gen-fuels are a hazy issue. There is so much to be proved or disproved, and so many bodies advocating one way or the other, that it’s difficult tell if biofuels are actually harmful to the environment or not.
So what is the issue with first-gen fuels? Aside from the dispute over the real associated carbon emissions, it’s a question of “food vs. fuel.” With land, as ever, a fixed resource, we can only do so much with the quality soil that we have. Planting crops earmarked for biofuels means that some months down the line where they might have filled mouths, they fill cars instead, and what is more, basic economics tells us that the reduced supply of food will fuel demand, and so raise food prices. Keep in mind also that we live in a global marketplace, even for something as perishable as crops. The price rise will affect everyone, but none so much as the poorest, of which even a 5% increase in prices would force the undernourished into starvation. To use economic terminology, the biofuel process is not Pareto efficient: it is in effect taking one set of resources people need, and converting into that required by another.
“Greenwashing” is a phrase that has been gradually filtering into the public consciousness. Essentially, it relates to a company that promotes a deceptive perception of environmentally friendly policies. A basic and quite literal example of this practice was apparent in BP’s adoption of their “Helios” logo, a vibrant, green and yellow sunflower which they adjoined with the tagline: “Beyond Petroleum.” The phrase is supposed to exemplify the company’s diversity from the product that made its name, but if that diversity is repeatedly accused of causing soil erosion, deforestation and carbon emissions, wouldn’t that company be greenwashing?
Though there are now several generations of biofuels in production, those undertaken by Big Oil are mostly of the dirty, first-gen kind. Because cellulosic ethanol production with second-gen fuels uses what is known as “marginal” land - growing plants in soil that cannot support edible crops - it does not detract from food production, and so mitigates the “food vs. fuel” problem. Empirical research also indicates that carbon emissions with second-gen fuels are significantly reduced in comparison to those of the first-generation. But marginal land is called marginal for a reason: it is limited. Steps are in process to make second-gen yields more efficient, and it is believed that second-gen fuels may one day be cost competitive compared to existing fossil fuels. Furthermore, we have not even mentioned third-gen fuels based on engineered crops - types of energy-rich algae, and fourth-gen fuels, which are actually designed in part to store CO2.
This is a lot to take in all at once, but of course, it is this convoluted reality of biofuels that makes greenwashing an easy practice. Although Big Oil may attempt to wear the green sash proudly, without perhaps being critical of how green their actions truly are, we are left with one line of defence that has the power to whip biofuel production into shape. The EU cannot force oil companies to be more transparent about complex products in a 20 second ad, but they can set targets. This year, now that wind of the failure of first-gen fuels has reached the ears of the European Parliament, they are removing first-gen contributions to biofuel goals. It will not stop oil companies from using first-gen in the green facade, but it is a start. We should not be so naive, however, as to believe that target alterations will be enough. There will have to be some voluntary movement in the private sector.
Whilst BP opened a first-gen plant in Hull, England last year, they swiftly cancelled plans for a second-gen refinery in Florida, that was to be the biggest of its kind. With the investment in first-gen something of a sunk cost, and second-gen not yet price competitive, companies are reluctant, it seems, to make an environmentally sensitive choice. Perhaps as government targets change and the technology becomes available, that choice will be more readily made, but it will no doubt be a slow process, and it is inaction in the private sector that can, in part, be blamed for that.
A critical problem is that greenwashing itself is a subjective term. If we cannot tell where the line is, who’s to say it’s been crossed? An example of this in terms of biofuels is the use of the word “renewable.” You may hear countless times that biofuels are the newest form of renewable energy, but are they in their own right renewable? Indeed how do we define what makes an energy source renewable? Eric Holt-Gimenez, executive director of Food First, had this to say on the Deconstructing Dinner podcast: “...technically fuel crops are renewable because you can grow them over and over again, but in practical terms that doesn’t mean that they’re sustainable. So what’s happening here is that the industry is attempting to greenwash fuel crops by saying “renewable”, and by association leading people to think that that means they’re sustainable... It doesn't quite describe things the way they really are.”
The nature of biofuels is complex, but the threat that climate change poses should be as clear as day. We all of us know what is at stake, and one certainty is that we will need every firm on our side, from the biggest to smallest, by compliance or coercion, if we are to make a fundamental change. Big Oil has a responsibility for transparency not only to its shareholders, but to everyone, as the unappointed stewards of our future.