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Biofuels in the Midwest: A Discussion

September 05, 2008 // 9:00am5:00pm

Now is a time of pressing energy and food concerns around the world - all countries are feeling the pressure of rising demand, high prices, global warming, and security uncertainties. On September 5-7, leading experts on the economy, agriculture, and biochemistry met at a Woodrow Wilson Center conference in Chicago, IL to discuss these global issues and the increasing use of biofuels to address them. In a two-day dialogue, the participants covered the contribution of biofuels to energy security as well as the potentially negative effects that biofuels have on the global agricultural market and the environment. After analyzing biofuels and comparing them with other alternative energy sources, they discussed the current policy system and suggested how it could be more effective at supporting a future of clean, sustainable, and secure fuel sources.

C. Ford Runge, a Distinguished McKnight University Professor of Applied Economics and Law at the University of Minnesota, opened the conference by describing the Wilson Center's ongoing focus on the impact of biofuels, which is supported by The Ford Foundation, The William and Flora Hewlett Foundation, The Joyce Foundation, and The David and Lucile Packard Foundation. Explaining that this particular meeting would be a discussion of biofuels in the Midwest, Runge also announced a follow-up meeting, which is set to occur in 2009 in Washington, D.C. to examine the effects of biofuels globally. A previous event, which covered the technological development of advanced biofuels and a brief overview of implications for the agricultural economy, occurred on May 15, 2008.

Robbin Johnson, a Teaching Fellow at the University of Minnesota Hubert H. Humphrey Institute for Public Affairs and a co-organizer of the conferences, emphasized that this continuous effort will focus not only on the trends and consequences of biofuels use, but also on policy decisions and opportunities.


Challenges in Fuel and Food Production

Food and fuel markets face numerous challenges in a globalizing world. Robert Thompson, the Gardner Endowed Chair in Agricultural Policy at the University of Illinois at Urbana-Champaign, explained that poverty reduction and increasing demand for meat, fruits, and vegetables could lead to the doubling of total food demand in the first half of the 21st century. Farmers currently use 70% of available freshwater, but cities compete fiercely for this resource. The result is that productivity will need to rise over the next few decades at the same time as water use will need to fall. This situation is made more difficult by the fact that developing countries lack access to agriculture technology. Foreign aid to agricultural development has dropped from 17% of total aid in 1980 to 3% in 2003. Thompson expressed his view that these pressures have to be dealt with before land should be used for ethanol production and he pushed for increased food production on arable land in South America and Africa. Tim Searchinger, a Research Scholar and Lecturer at Princeton University and a Transatlantic Fellow of the German Marshall Fund of the U.S., agreed that food production must come first, followed by necessary replanting of forests and other biomass to absorb carbon, and only lastly for energy purposes.


Biofuels Production and Use: The Environmental and Health Effects

The use of corn-based ethanol not only diverts resources away from food production, but also has drastically negative environmental consequences, similar to those of gasoline. Mark Jacobson, the Director of the Atmosphere/Energy Program and Professor of Civil and Environmental Engineering at Stanford University, analyzed those consequences by comparing energy sources such as corn-based ethanol, cellulosic ethanol, wind, solar, geothermal, hydropower, nuclear, and clean coal, all of which could be used to power U.S. vehicles instead of gasoline, which currently produces about 32% of total national CO2 emissions. Corn-based ethanol has the least potential to decrease CO2 emissions (due to emissions from production, fertilization, water use, transportation of crops, and the conversion of more land for agriculture), followed by cellulosic ethanol.

According to Jacobson, the harmful effects of biofuels go much further. Air pollution causes one-sixth of all deaths worldwide, and the use of gasoline in vehicles in the U.S. will cause 15,000 deaths by 2020. Switching to either corn-based or cellulosic ethanol entirely would reduce carcinogens emitted, but would increase the emission of acetaldehyde and, in some parts of the country, ozone. The result would be a net zero change in pollution – so, even if all vehicles in the U.S. were run on ethanol, their emissions would still result in about 15,000 deaths by 2020, even after accounting for gains in fuel efficiency. Jacobson argued that our goal should be to reduce as many of those deaths as possible, an aim which cannot be reached by substituting ethanol for gasoline.

Arvin Mosier, formerly a Research Chemist with USDA/ARS, added to this picture an explanation of the use of fertilizer in producing corn for ethanol, which results in the emission of nitrous oxide (N2O). He stated that N2O, like CO2, has risen significantly since industrialization and is a dangerous greenhouse gas. A database compiled by the Intergovernmental Panel on Climate Change (IPCC), which is based on observed measurements, shows that the net change in N2O emissions from substituting corn-based ethanol for gasoline will depend on the percentage of nitrogen (N) in the fertilizer used to grow the corn, as follows: 1.5% N results in a 15% emission reduction, 3% N results in a 0% emission reduction, and finally 5% N results in a 21% emission increase. In general, while emissions could either increase or decrease with the use of corn-based ethanol, the net effect tends to be zero.

Several meeting participants added other environmental implications from the use of biofuels. Searchinger explained that the more land is used for both food and fuel production, the less is retained as forests or fields that take CO2 out of the atmosphere. Thus, only using very un-arable land for ethanol production would create a positive atmospheric effect. Crediting his colleague Ralph Heinlich, the Principal and Owner of Agricultural Conservation Economics, Searchinger added that, as the price of corn goes up, the use of fertilizer goes up (for every increased $1 in the price of corn, an increase of 21.4 lbs. of fertilizer), putting Mosier's discussion of nitrous oxide into greater perspective. Finally, Thomas Simpson, the President and Executive Director of Water Stewardship, Inc., added that the production of corn-based ethanol consumes water at the rate of 420 billion gallons per year. All participants agreed: these harmful effects, in addition to the only null or small reductions in CO2 emissions and the continued emission of other dangerous pollutants, make biofuels the least attractive alternative to gasoline as a fuel source.


What Choice Do We Have? Other Alternative Energy Sources

One of the alternative sources beyond corn-based ethanol that scientists and especially politicians have recently championed is cellulosic, or advanced, ethanol. Ken Cook, the President and Co-Founder of the Environmental Working Group (EWG), explained the idea: cellulosic ethanol could be produced from biomass (such as switchgrass) on marginal lands that are neither being used for agriculture nor as forest or fields that would otherwise be absorbing CO2 from the atmosphere, reducing the effect of ethanol production on both the food supply and climate change. In practice, however, whole farms and fields have been converted to produce cellulosic ethanol. It is no longer reasonable, then, to think that only strips of unused and wasted land will be utilized. This reality, combined with the dangerous effects of both nitrous oxide and pollutants such as acetaldehyde, which Mosier and Jacobson contend are byproducts of both corn-based and advanced ethanol, leads to the conclusion that cellulosic is also a poor alternative.

Jacobson pointed to wind power as an alternative with much greater potential to meet energy needs while mitigating security and environmental concerns. He noted that wind power is gaining increasing momentum and scientific backing as the best – most sustainable, cleanest, least land-intensive, least water-using, and most promising – alternative energy source. In fact, in a comprehensive measurement of negative impacts, and especially the resulting health consequences, Jacobson analyzed each possible energy source by its "lifecycle" effect (which includes climate change, air quality effects, land use, water use, wildlife effects, reliability, and security from terrorist threat) and wind power came out strongly on top. He presented these results to a Congressional Committee earlier this year and he reported attracting strong interest from the committee.

Jacbonson explained the benefits of wind turbines: they produce virtually zero carbon emissions, use minimal water resources, and are long-lasting. Moreover, building wind turbines on a total of one square kilometer of land throughout the U.S. would produce enough power to run the entire fleet of U.S. vehicles (whereas, it would take an area four times the size of California for corn-based ethanol to do the same). Jacobson added that wind power is reliable if backed by solar, hydro, and geothermal energy. Finally, he explained that his team at Stanford has produced the first-ever factual map of the world's wind, which demonstrates that the entire world could be powered on wind alone. So what has prevented wind from taking off? Jacobson explained that you need both subsidies, to offset the low cost of reliable coal power, and massive investments in the electric grid to facilitate transmission.


U.S. Policy and the Traditional Support System for Biofuels

After the environmental, health, and agricultural consequences of biofuels were made clear, the participants began to discuss how U.S. policy might break away from a long history of subsidies, which have distorted the market and favored the production of biofuels, preventing other energy technologies from coming to fruition.

Doug Koplow, the founder of Earth Track, described the support system for biofuels. Currently, there are more than 220 subsidies to ethanol and biodiesel nationwide, and, since December 2007, new subsidies have been proposed with the Energy Independence and Security Act (EISA) and the 2008 Farm Bill. Though these two recent pieces of legislation reduced the blenders' credit, which promotes the production of corn-based ethanol, they increased mandated amounts of biofuels that must be produced and failed to lower tariffs on imports of other types of ethanol. If the industry meets the mandate, Koplow calculates that the U.S. federal government will spend $410 billion in subsidies between 2008 and 2022.

Koplow explained that, in his view, the goal is "to have a more competitive industry, rather than a more politicized industry." To that effect, he gave several recommendations for redirecting biofuels subsidies: distribute subsidies as competitive tender available to all methods of displacing gasoline, automatically phase-out subsidies, and make environmental impacts more central by applying environmental screens to all large subsidies and establishing costs of inputs such as water. Otto Doering, a public policy specialist on economic issues affecting agriculture, natural resources, and energy at Purdue University, added that the mandate for cellulosic ethanol production "has to be tied to performance standards" such as water use, erosion, and wildlife impacts. Furthermore, if the money spent on subsidies each year was instead spent on investments in improving the efficiency of the U.S. automobile fleet, the result would be much more sustainable and cost-effective – as "the gift that keeps on giving."

Daniel Sumner, the Director of the University of California Agricultural Issues Center and the Frank H. Buck, Jr. Chair Professor at the University of California at Davis, gave the example of California, which has passed a mandate to decrease the "life-cycle carbon intensity" of fuels by ten percent by the year 2020. Jacobson, however, pointed out that California is ahead of the rest of the country in this effort, because it already has a significant number of electric vehicles on the road.

Jason Clay, the Senior Vice President of Markets at the World Wildlife Fund, pushed that the United States should follow Europe's lead by implementing a 30€, or at least $30, per ton carbon cost. Koplow agreed, explaining that the government should treat farms as industries – which ought to pay for their emissions – rather than rewarding whichever industry is able to produce biomass for ethanol in the least harmful way.


Changing the Status Quo: Towards a More Competitive and Sustainable Energy Future

Runge emphasized the importance of changing the policy direction. As a result of rising corn prices, "people are starving," he said. And, the effects of biofuels on ecosystems have been devastating. Searchinger added that global warming forces a change in perspective: these issues have to be dealt with on a global, rather than local, level. Jacobson restated the importance of looking at all the options – when other energy sources are more environmentally-friendly, not supporting them creates a missed opportunity.

There are, however, significant political challenges to reconstructing the promotion of alternative energies in this country. Cook made the point that it is possible to "win the argument, but still not win the votes." In other words, very well-supported explanations of the negative environmental, health, and agriculture effects of biofuels cannot alone turn the tide of policy.

Presently, many politicians and public organizations have curbed their encouragement of corn-based ethanol but continue to put stock in the possibilities of cellulosic ethanol. As both Robert Wisner, a Professor at Iowa State University, and Ken Cook explained, one reason for that support is the desire to achieve energy security as a primary objective, rather than mitigating environmental and food concerns. Additionally, many politicians have found it easier to make a transition from supporting corn-based ethanol to cellulosic ethanol, rather than to more long-term, cutting-edge technologies. Finally, the Midwest is heavily dependent on revenue from corn production and many of the Midwest land grant universities derive considerable R&D support for research on biofuels. Robert Elde, the Dean of the University of Minnesota's College of Biological Sciences and Chair of the Executive Committee for the Initiative for Renewable Energy and the Environment (IREE), said that, without substantial investment in economic development in the Midwest, economic loss from decreased production of ethanol would be great.

There are, however, reasons to believe that policy change is indeed occurring, and that cleaner and more sustainable energy alternatives will be better supported in the future. According to Searchinger, the United Kingdom, Switzerland, and the Netherlands have already adopted standards for biofuels, which could lead to the implementation of U.S. or international standards. Clay added that organic agriculture businesses are fighting for standards as well.

Finally, several participants pointed out that there is an intersection of food needs, national security, and environmental concerns, because many alternative energy sources can respond to all three. Wisner suggested that the best way to confront uncertainty over what is politically feasible is to better clarify and support the "ideal outcomes." Jacobson concluded the discussion by recommending a path forward: develop a comprehensive evaluation of all options, with strong research on factors such as land use, water use, national security, environmental effects, health outcomes, and climate, and then determine which are best. He viewed this type of analysis as the most straightforward way to move toward better overall results – greater energy security, mitigation of climate change and dangerous pollutants, and the availability of adequate food and fuel supplies into the future.


Drafted by Jacqueline Nader, STAGE Program
Kent H. Hughes, STAGE Program

 

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