Transportation is responsible for two-thirds of the US’s oil consumption and nearly 40 percent of U.S. global warming pollution on a life cycle basis. To dramatically cut emissions from this sector, a comprehensive solution must include improved vehicle fuel efficiency, smart growth policies that reduce vehicle miles traveled, and clean fuel alternatives, according to a new report issued today by the Union of Concerned Scientists (UCS).

“We need to wean ourselves off oil, but we should replace it with the cleanest alternatives possible,” said Patrician Monahan, author of the report and deputy director of UCS’s Clean Vehicles Program. “Let’s not trade one bad habit for another.”

Liquid coal, for example, can release 80 percent more global warming pollution than gasoline, the report found. Corn ethanol, conversely, could be either more polluting or less than gasoline, depending on how the corn is grown and the ethanol is produced. On average, corn ethanol can reduce emissions about 20 percent, though there is uncertainty due to differing land use practices. The cleanest alternative, cellulosic ethanol from grasses or wood chips, could reduce emissions by more than 85 percent.

 “Biofuels have a Jekyll and Hyde reputation depending on what study you read and what assumptions you make,” Monahan said. “But liquid coal is a loser no matter how you look at it. We need to set standards so farmers know the right way to produce cleaner fuels.” She also cautioned that we must ensure that biofuels and other alternative fuels do not threaten the environment or limit food production.

 The report evaluated two scenarios for alternative fuels, one carbon-intensive—meaning that it would produce significantly more global warming pollution than burning gasoline -- and the other low-carbon—meaning that it would produce significantly less. The analysis assumed that alternative fuels will replace 37 billion gallons of gasoline, about 20 percent of the fuel UCS projects Americans will consume in 2030.

In both scenarios, conventional biofuels would meet 25 percent of the demand for alternative fuels. In the carbon-intensive scenario, the remaining demand would be met by liquid coal. The carbon-intensive scenario would increase emissions by 233 million metric tons—equivalent to adding about 34 million cars to the road, the number of new cars and light trucks currently sold nationally over a two-year period. By contrast, the low-carbon scenario relies on advanced biofuels to meet 75 percent of the demand. That would cut global warming pollution by 244 million metric tons, akin to taking 35 million of today’s cars off the road. The report called for a national low-carbon fuel standard that accounts for alternative fuels’ global warming emissions over their entire life cycle—from till to tailpipe—and requires them to emit less pollution than today’s petroleum-based fuels.

 At the tailpipe, gasoline, liquid coal and biofuels release about the same amount of global warming pollution. But there are dramatic differences in the amount of pollution emitted by extracting a raw feedstock and refining it into a finished fuel. Biofuels can have an advantage over liquid coal and gasoline because plants capture carbon dioxide, the most common global warming gas, as they grow. But producing biofuels will generate emissions, which at the farm will vary depending on tilling practices, fertilizer use, previous land use, and the fossil fuels used to power farm equipment. At the ethanol plant, emissions will depend on the efficiency of the manufacturing process and the fuel used to power the facility. All of these factors must be considered in a full life cycle analysis.

 Life cycle analysis for alternative fuels could help farmers and the biofuels industry, according to Gregg Heide of the Iowa Farmers Union. “Farmers want to help get the country off of oil,” the corn and soybean farmer said. “Give us some guidelines, tell us where to cut pollution, and we can do it. The coal lobby is active everywhere, even here in Iowa. It would be counterproductive if dirty fuels like liquid coal started muscling out biofuels in the alternative fuels market.”

Congress is now considering an energy bill that includes a renewable fuel standard giving the Environmental Protection Agency the authority to develop life cycle analysis guidelines. To date, the federal government has been promoting both cleaner and dirtier fuels. For instance, Congress has approved funding for research into next-generation ultra-clean biofuels, but it also is subsidizing research into liquid coal processing technology.

“Government policies and high oil prices have whetted our growing appetite for all alternative fuels, good and bad alike,” said Eli Hopson, Washington representative for Clean Vehicles at UCS. “With the wrong policy, liquid coal could displace cleaner alternatives. Biofuels can be a staple of our low carbon fuel diet, but only if policies are in place that ‘count carbs’ and ‘make carbs count.’ ”

 At least one state is addressing the problem. In January, California Gov. Arnold Schwarzenegger issued an executive order calling for establishing a state low-carbon fuel standard. The California Air Resources Board is currently developing regulations that would require manufacturers of transportation fuel sold in the state to reduce per gallon emissions of global warming pollution by at least 10 percent. Arizona, Minnesota, New Mexico, Oregon and Washington State are considering similar policies.