Fargo, North Dakota
June 26, 2008
By Cole Gustafson, Biofuels
Economist
North Dakota State
University (NDSU) Extension Service
Part I
Ethanol has received considerable scrutiny from the national
media questioning the industry's impact on food prices and
availability. The crux of these stories has been that expansion
of the ethanol industry has required more crop acres for corn
production, which has resulted in fewer acres being available
for food production. The ethanol industry has countered these
arguments by stating that byproduct feeds (distillers grains)
are now available as replacement feedstuffs for livestock and
that gasoline prices would be considerably higher without the
availability of ethanol.
This is not a trivial argument. The U.S. is expected to produce
more than 9 billion gallons of ethanol this year. Assuming
current ethanol plants produce 3 gallons of ethanol from each
bushel of corn, 3 billion bushels of corn will be required in
2008. With a national average corn yield of 150 bushels per
acre, 20 million acres will be utilized.
While both sides can debate the impact of how we got here, a
more constructive analysis is needed to assist farmers and
ranchers with strategic planning so they can respond optimally
to the new 2007 Energy Independence and Security Act.
The 2007 Energy Independence and Security Act sets a national
goal of producing 36 billion gallons per year (BGY) of biofuels
annually. This production goal is four times the previous goal
of producing 7.5 BGY specified in the 2005 Renewable Fuel
Standard Act. That earlier goal was surpassed last year.
An important distinction in the new 2007 Energy Independence and
Security Act are the different types of biofuels defined in the
legislation. The different types are conventional biofuels,
advanced biofuels and cellulosic biofuels.
Conventional biofuels primarily are ethanol that is produced
from traditional corn ethanol plants. Cellulosic biofuels are
those fuels that potentially could be produced from a wide
variety of feedstocks, such as stovers, grasses, wood products
and urban yard waste. Advanced biofuels are a special category
in which sugar beet- and cane-produced ethanol fits in. Recall
in a previous column that each category technically is defined
on its contribution to the reduction of greenhouse gas emissions
(conventional a 20 percent reduction, advanced 50 percent and
cellulosic 60 percent).
Economists are striving to delineate the impact of the 2007
Energy Independence and Security Act on crop acreage demand. At
the moment, a wide range of scenarios is emerging. These
scenarios differ primarily on their assumptions regarding
technology and policy. For illustrative purposes, I will discuss
two scenarios that are on each end of the spectrum.
The first extreme scenario assumes that ethanol production
technology and existing legislation with respect to ethanol
policy will remain static. If this is the case, incredible
demands will be placed on existing agricultural resources. With
stagnant corn yields, more acres will be required for corn
production to meet the production goal for conventional
biofuels. In addition, acreage also will be needed to produce
crops for both advanced and cellulosic biofuels. While some new
land may be brought into crop production, most of this acreage
will have to be taken away from other crops.
Scenario No. 1 would place extreme pressure on already tight
feed and food supplies. Critics of renewable energy often base
arguments on this scenario.
While this scenario could happen, it is doubtful that either
technology and/or policy will remain stagnant. Most likely, U.S.
farm technology will continue to evolve as it has during the
past century. Likewise, federal energy and agriculture policy
will adjust to this new setting.
Next time, I will discuss scenario No. 2. Under this view, it is
possible that no additional cropland would be required to meet
the new national goal of producing 36 BGY of biofuel. Again, it
is unlikely or extreme because three important technology
innovations and policy changes will have to happen. More next
time.
Questions
Q: Are there any byproducts from cellulosic ethanol, similar to
distillers grains, from the ethanol process? (Bill, White River,
S.D.)
A: There is a byproduct from the cellulosic to ethanol process
called lignin.
However, whether the cellulosic conversion process is thermal or
enzymatic, it is a more complete process than corn ethanol. Few,
if any, nutrients are left in the byproduct. It's only real
value is as an energy source and most likely will be burned as
fuel in the plant. A colleague compares lignin to twine on a
bale of switchgrass hay. It's fiberous, so cattle won't eat it.
That leaves burning as the only thing you can do with it. |
|
