West Des Moines, Iowa
March 5, 2008
A new white paper just released by
The Context Network
exposes the impacts of the government’s Energy Independence and
Security Act of 2007 (EISA) on agriculture over the next 14
years. Specifically, the report evaluates three time brackets
within that 14-year period. It assesses whether requirements of
the law could be met and appraises the actual impact in each
time period and for specific feedstocks contributing to biofuel
production.
EISA is an omnibus energy policy law that consists mainly of
provisions designed to increase energy efficiency and the
availability of new energy. EISA’s Title II contains a new set
of biofuels requirements that increases the amount to be
utilized in the U.S. to 36 billion gallons by 2022, and goes on
to describe what feedstocks will be utilized.
Context Network Senior Consultant Jim Murphy was principle
author of this white paper. “Rather than simply assuming all
provisions of EISA would be met, this report is based on our
analysis of what volumes of different biofuels will actually be
produced and the actual impact on corn, soybean oil, sorghum and
cellulosic feedstock, demand, total acres, crop prices and the
effect on net returns per acre.”
He added, “Our analysis revealed some significant departures
from conventional expectations regarding the availability of
some resources to fulfill government projections.” Murphy noted
that corn starch based ethanol has more potential than some may
think, but that biodiesel and cellulosic ethanol face
considerable economic challenges”. He said, “Cellulosic
ethanol’s future is very much dependent on continued high oil
prices, future legislation on green house gases and technology
development.”
Context Network Partner, Tray Thomas added, “We’re confident
this report will provide significant value to all organizations
with a stake in the biofuels industry including crop input
suppliers, equipment manufacturers, biofuels producers and
policy makers. The biofuels industry has already had a huge
impact on agriculture and Context will continue to monitor it
closely for our clients to separate (the sometimes) unbridled
optimism from what is economically feasible.”
The Context Network provides business management and strategy
consulting services to the world’s leading agriculture,
biotechnology and food companies and government agencies and
institutions. Major areas of expertise include strategy, merger
and acquisition support, valuation of new technologies,
formation of alliances, and market research. The West Des
Moines-based firm is composed of a core of professional
consultants that is complemented by a network of more than 100
industry and subject-area experts. |
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