Biofuels, energy-security and global-warming policy interactions

Abstract

There has been a significant movement in political consensus towards an energy future with a substantially larger renewable-energy component. One of the major drivers is the perception that importing over 60% of our oil reduces our national security. A recent estimate of the hidden cost of oil dependence amounts to about $3 per gallon of liquid fuel. This estimate includes incremental military costs, supply-disruption costs and direct economic costs. Many argue that energy security is a major issue that must be addressed in today’s policy environment. Another issue is global warming caused by human interventions. Biofuels, especially cellulosic-based biofuels, emit much less carbon dioxide into the atmosphere than conventional petroleum sources.