The
U.S. could produce enough biomass annually
to replace more than one-third of its current
oil consumption, while continuing to meet
demands for food, feed, and export, a major
study found. Analysts at the Oak Ridge National
Laboratory in 2005 concluded: “About
368 million dry tons of sustainably removable
biomass could be produced on forestlands,
and about 998 million dry tons could come
from agricultural lands,” including
energy crops grown on 55 million acres.
That compares to roughly 400 million acres
of cropland in the U.S., including 36 million
acres held out of cultivation in the Conservation
Reserve Program.
Estimates of agricultural yield –
tons per acre – are key to projecting
U.S. biofuels potential. The current productivity
of switchgrass is typically reported as
five tons an acre. The Oak Ridge study,
looking out to 2030, estimated a yield of
eight tons per acre. Most analyses of potential
biofuels production have suggested targets
of 60-100 billion gallons. At 10 tons per
acre – seen as an achievable yield
over time because energy crops like switchgrass
have not yet been optimized through research
– reaching those targets would require
60-100 million acres.
The need for land would be further diminished
if energy crops could meet more than one
need. Soybeans are currently grown on 73
million acres to provide animal feed and
vegetable oil. Switchgrass contains protein
that could be extracted for animal feed.
Thus, one analysis suggests, “While
switchgrass cannot be used to produce vegetable
oil, if it can provide a similar financial
value to growers and a similar product to
meet our animal feed protein needs, then
we may be able to convert much of the soybean
acreage to switchgrass.”
Of course, if the goal is reduced oil dependence,
supply is only half of the answer. Increased
vehicle efficiency also reduces total oil
consumption and the need for biofuels to
act as a replacement.
Back to top Yes,
especially because biofuels can be produced
from plants (and parts of plants) that now
go unused. American agriculture’s
problem is not one of shortage but of overproduction
– which is why the U.S. has perennial
crop surpluses. As the Oak Ridge study found,
the U.S. could displace more than one-third
of its current oil consumption with biofuels
while continuing to meet demands for food,
feed, and export. In fact, roughly half
of the nation’s 2.26 billion acres
have some potential for growing biomass.
The perceived food vs. fuel conflict will
be mitigated by producing biofuels from
non-food crops and materials now considered
waste. Potential feedstocks include agricultural
residues (e.g., corn stalks and wheat straw,
forest residues such as sawdust and wood
chips, yard waste, municipal solid waste
and even animal wastes). The United States
could produce 40 billion gallons of ethanol
a year – equivalent to 20% of current
gasoline demand – from agricultural
residues alone.
And crops such as switchgrass can be planted
on marginal land, reducing the need to use
productive cropland or forests for energy
crop production.
Lands now planted for export – currently
one out of every three U.S. farm acres –
could also be devoted to domestic fuel production.
Back to top The
use of agricultural products for energy
is not likely to have more than a minor
impact on retail food prices. Less than
5% of the cost of corn flakes or corn syrup,
for example, stems from the price of corn.
Other expenses involved in bringing food
to market, including packaging, advertising,
and transportation, represent a larger share
of costs. Through 2005, as the chart at
right shows, the demand for ethanol did
not have a long-term upward effect on corn
prices because of increases in total production;
corn prices spiked upward at the end of
2006 and reached $4 per bushel, but it remains
to be seen if that is a temporary phenomenon.
Corn is an important source of animal feed
and thus a significant factor in meat prices.
However, the production of ethanol yields
a by-product called distillers grains that
is a high-protein cattle feed and can replace
corn for half of the animal’s diet.
It is less useful as a substitute for pork
and poultry.
Projections of future biofuels production
generally include no more than 15 to 20
billion gallons of ethanol from corn.
This is not a physical limitation as much
as it is an assessment of what is economically
practical. For example, the 2005 Oak Ridge
study calculated the amount of biomass available
after projected demands for food, feed,
and export were met.
Back to top Many experts believe this new demand
for agricultural products could actually
help ease hunger. Hunger is caused more
by a lack of money or distribution than
a lack of food. As analyst Jason Clay has
noted, “While there is arguably more
food per capita being produced in today’s
world than ever before, hunger and poverty
are growing. Over the past 35 years, per
capita food production has grown 16% faster
than population. Even so, the number of
hungry people in every country except China
increased by an average of 11% from 1970
to 1990. In Africa, agriculture employs
about two-thirds of the labor force, accounts
for 37% of GNP, and is responsible for half
of exports. Yet, the sector generates insufficient
wealth among the rural poor to adequately
address hunger.”
Biofuels could help change all that. In
many developing countries, agricultural
productivity is held back by a lack of access
to fertilizer and equipment. Biofuels could
attract investment that would support agricultural
improvements across the board, which would
benefit food production, accelerate rural
economic development, and alleviate poverty
and migration to the cities. Higher world
crop prices will support farm income. Protein
from non-food energy crops may also become
available for animal feed just as it is
from corn today.
Back to top The amount of water needed to produce
crops varies considerably. Perennial prairie
grasses such as switchgrass are native,
hardy, and drought-resistant. They require
far less water than intensive row crops.
Similarly, jatropha bushes, a source of
biodiesel, can survive dry conditions and
poor soils. Other grasses require abundant
rainfall to thrive. (In the U.S. about 15%
of corn acreage is irrigated.)
Of course, areas with low rainfall will
be less productive than those with higher
rainfall. For economic reasons, however,
projections of biomass crop production do
not include land that needs irrigation.
Processing crops into biofuels also requires
water, although much less than is used for
irrigating crops. A new 40-million-gallon-per-year
ethanol facility needs about 100 million
gallons per year of fresh water.
This is not an unusual amount for an industrial
use, such as a food processing facility.
The ethanol industry has reduced its water
consumption from 25 gallons per bushel of
corn processed in the early 1980s to less
than seven gallons per bushel today. Much
of the water used in an ethanol production
facility is recycled back into the process.
However, water supplies are stressed in
many areas of the country, and future biofuels
production may be limited by access to aquifers
and other water sources.
Back to top The increased demand for corn for
ethanol production clearly has a positive
effect on net farm income and also reduces
government outlays to farmers by raising
the market price of corn. A 2000 USDA study
estimated the economic effects on the farm
economy if annual ethanol production grew
to five billion gallons by 2010. That level
of production was projected to increase
the price of corn by an estimated $0.32
per bushel and to boost annual net farm
income by almost $3 billion. In this scenario,
the increase in ethanol production also
lowered the U.S. trade deficit, and higher
corn prices resulted in lower farm program
payments.
In 2006 high corn prices caused by ethanol
demand reduced U.S. farm support payments
by roughly $6 billion.
Production of non-food cellulosic crops
will have similar economic benefits for
farmers. Growing switchgrass on 40 million
acres is predicted to increase net farm
returns by $6 billion annually by 2013,
while reducing government support payments
by nearly $2 billion per year. The benefit
will stem in part from increases in traditional
crop prices from 9% to 14% as production
is shifted away from those crops.
The map at right shows the projected increase
in net returns on major commodity crops
from this scenario. The green areas gain
up to 40% and the blue areas more than that.
The
economic benefits of processing agricultural
products into ethanol and biodiesel will
provide additional value for rural America.
Increasing ethanol production from today’s
level of 4 billion gallons a year to 50
billion gallons will require construction
of nearly 1,000 new production facilities.
Because biomass is relatively lightweight
and bulky and thus costly to transport,
those facilities must be built close to
where their feedstock is grown – in
rural areas. Conventional dry-mill corn
ethanol production facilities are estimated
to cost $1.40 per gallon of capacity to
construct,
and cellulosic ethanol plants are expected
to be several times more expensive. This
suggests that a capital investment of at
least $100 billion will be required.
“Energy
is the new cash crop of rural America.”
– U.S. Secretary of Agriculture
Mike Johanns
