Jason Barton

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Archive for the ‘Agriculture’ tag

America’s biofuel muddle

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The article I posted the other day about the increasing likelihood of far greater U.S. importation of Brazilian ethanol has garnered a number of responses on Facebook, LinkedIn, and, mostly, via email. Few seem to want to post here on my site, despite my encouragement.

What’s maybe most interesting has been the abundance of emotion, even amongst a dearth of accurate information, in several of the responses.it’s a fascinating time to be alive, and to be working in the energy sector.

Here’s some more fodder…

Coming up empty

America will have trouble meeting its ambitious goals for biofuels

Mar 25th 2010 | CHICAGO | From The Economist print edition

THE renewable-fuel standard released in February by America’s Environmental Protection Agency (EPA) paints an ambitious picture of biofuels’ future. It wants the amount of the stuff used as transport fuel to climb from 13 billion gallons (49 billion litres) in 2010 to 36 billion gallons in 2022, requiring by far the largest part of that increase to come from various advanced biofuels, rather than ethanol made from corn (maize). But although the future looks exciting, the present is rather grim. The EPA has been forced to slash its 2010 mandate for the most widely touted of the non-corn biofuels, cellulosic ethanol, from 100m gallons to just 6.5m, less than a thousandth of the 11 billion gallons produced from corn in 2009.

Read the entire article here.

RFS2 reduces 2010 cellulosic ethanol requirement

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Well, this is fairly important news for those of us (meganerds) who are directly involved with this whole biofuels thing.

As a bit of background, in 2007 George Bush signed the Energy Independence and Security Act, which included the Renewable Fuel Standards (RFS), mandating increasing amounts of renewable fuels, almost entirely ethanol, in the U.S. gasoline supply. The standards, which mandate nearly 13 billion gallons of renewable fuels this year, and up to 36 B gals in 2022, also has substandards for cellulosic ethanol and “advanced biofuels,” which are defined as those that decrease greenhouse gas emissions by at least 50% compared to gasoline. (I know, hard to believe that W. would pen a law that mandated GHG reductions, but there we are.)

These new laws, known as RFS2, do not change the overall requirements, but affect some of the environmental accounting and the substandards. First, the original RFS mandated 100 million gallons of cellulosic ethanol, which is ethanol that comes from the green portions of plants such as corn and prairie grasses. The problem is that the technology for these fuels still has a little ways to go, and we are not capable of producing 100 million gallons of it. RFS2 reduces that requirement to 6.5 million gallons, quite a reduction indeed.

The other change is in the assessments of environmental impacts of biofuels, mainly lifecycle analysis (LCA) of GHGs, including those from land use changes. The argument, put forth most notably in a paper by Searchinger et al.  in Science magazine, posits that when corn is diverted from the food supply and used for biofuels, the decreased supply and increased prices induce farmers in other parts of the world to plant more corn. At times this may mean clearing forest for the new crops, and rarely is agricultural land as productive, or are fertilizers and other inputs as available, as in the U.S. Therefore, the 130 or so bushels of corn from one acre of land in the U.S. that’s diverted to ethanol production can mean, for example, an acre and a half of forest cleared in another part of the world. This, Searchinger and others have argued, defeats the purpose of biofuels in that their proposed environmental benefits are undermined by this deforestation.

In the new RFS2 rulings, these land use changes are now counted in the GHG calculations for biofuels, which is a huge advantage for cellulosic biofuels that are not reported to cause these indirect land use changes (ILUCs), but a bit of a hit for corn ethanol producers. Poet LLC’s CEO, Jeff Broin argues in the article below, “we are concerned that some pieces of the rules put out by EPA today run contrary to that stated effort. Although the international indirect land use change penalty has been lessened somewhat, EPA still relied on the disproven theory when all of the data shows that ethanol production continues to improve and isn’t requiring new land.” His statement that Searchinger’s theory is “disproven” stems from the fact that tracking these land use changes is basically impossible. We can’t very well say that one particular acre of corn in the U.S. diverted to ethanol means that another specific acre of land is diverted to corn from a particular land use to make up for the fallen supply.

As the debate rages on, as I’ve said in previous posts on this site, corn ethanol does not seem to me to translate to healthy, efficient use of land, especially given the terrible effects on land and water from the way we grow corn. I am also not convinced that such large scale corn ethanol production is necessary in order ease the transition to second and third generation biofuels technologies. Finally, while I believe there is great promise for those advanced technologies, the greatest promise, in terms of efficacy and cost effectiveness, lies in the simple task of using less transportation fuel.

By Lisa Gibson

Posted February 3, 2010, at 4:22 p.m. CST

The new requirement for cellulosic biofuel production in 2010 is reduced to 6.5 million ethanol–equivalent gallons in the renewable fuels standard (RFS2), down significantly from the 100 million gallons established in RFS1, included in the Energy Policy Act of 2005. The U.S. EPA released final RFS2 rules Feb. 3 as media outlets, producers and others scrambled to find out how it will affect their industries.

[…]

“I think it’s a great change,” said Arnold Klann, CEO of California-based BlueFire ethanol, which focuses on producing cellulosic ethanol from waste. “It was very clear our industry couldn’t meet the standard set for this year.” He added that the new goal is easily achievable and was a good decision.

[…]

Ethanol from sugarcane also meets the standard, reducing GHG emissions by 61 percent. “EPA’s reaffirmation of sugarcane ethanol’s superior GHG reduction confirms that sustainably-produced biofuels can play an important role in climate mitigation,” said Joel Velasco, chief representative in Washington for the Brazilian Sugarcane Industry Association (UNICA). “Sugarcane ethanol is a first generation biofuel with third generation performance.”

[…]

RFS2 rules were originally scheduled for release Jan. 1, 2009, but inclusion of new elements pushed it back. It expands the scope of the program and lays out the strategy for reaching the RFS of 36 billion gallons by 2022. Currently, the country is not on track to meet that goal, as only about 12 billion gallons of biofuels are produced annually. President Obama’s biofuels initiative, also released Feb. 3, states that the goals will be met by supporting the existing biofuels industry, while accelerating the commercial establishment of advanced biofuels by increasing communication and having a strategic plan across the U.S. government, and by employing strategic public-private partnerships.

Read the entire article here.

Brazil hopes Shell-Cosan can boost ethanol exports

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Inae Riveras – Analysis
SAO PAULO
Wed Feb 3, 2010 1:42pm EST

A worker shows a gas tank cover of Fiat flex car on the assembly line at the company's Betim Plant near Belo Horizonte October 20, 2009. REUTERS/Washington Alves

A worker shows a gas tank cover of Fiat flex car on the assembly line at the company’s Betim Plant near Belo Horizonte October 20, 2009.

Credit: Reuters/Washington Alves

SAO PAULO (Reuters) – Brazil’s ethanol industry, which invested heavily to boost output of the cane-based biofuel, is counting on a tie-up between sugar and ethanol producer Cosan and Royal Dutch Shell Plc to revive its prospects after exports fell short of expectations.

The $21-billion-a-year ethanol joint venture announced by the two companies on Monday will enable Cosan, Brazil’s biggest ethanol maker, to move product more efficiently thanks to Shell’s global fuel distribution and retail system.

[…]

But whether that happens will depend largely on outside factors: whether oil is costly enough to make ethanol competitive; whether Brazil’s mills can provide a steady stream of biofuel; and whether key markets such as the United States will be more open to ethanol imports.

[…]

Some analysts say any growth in ethanol exports will depend on oil prices more than other factor.

[…]

Futures markets for ethanol have been incapable of minimizing producers’ risks. Deals are largely done on a spot basis — both in and outside Brazil. This makes it difficult for buyers and sellers to hedge against market volatility.

Read the entire article here.

California’s agricultural heartland threatens to become a wasteland

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Agriculture has been fascinating to me for so many reasons. This article captures the intersections between economics and resource issues, history and culture. And since everyone eats and jobs are at the foundation of the recovery we need, stories like this speak to many essential issues at once.

The Appalachia of the West

Jan 21st 2010 | FIELDS BETWEEN BAKERSFIELD AND VISALIA
From The Economist print edition

MIKE CHRISMAN looks out from his SUV as he drives through seemingly endless rows of walnut trees on his property near Visalia, in central California. “I have to be optimistic, I’m so tied to this land,” he says. His great-grandfather, after trying his luck in the Gold Rush, settled in Visalia in the 1850s, and the family has been there ever since. But as California’s secretary for natural resources—a job at the intersection of the environmental and farming lobbies, perennially at loggerheads over the state’s scarcest resource, water—Mr Chrisman also knows that optimism has become a minority view.

Read the entire article here.

Written by Jason

January 25th, 2010 at 5:27 am

Brazil opens world’s first ethanol-fired power plant

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Projects like this are encouraging, especially if the priority remains focused on decreasing energy consumption. Other companies, such as Community Power Corporation (CPC) of Colorado, already have modular electricity generators that use biomass as a feedstock. The high glucose content in sugarcane should make Petrobras and GE’s efforts that much more efficient. Brazil’s ethanol refineries generate about 3% of the county’s electricity by burning the biomass left over after the sugar is extracted from cane to make ethanol for transportation. So this project has the potential to create highly versatile powerplants that can produce electricity as well as liquid fuels, depending on the proportion demanded by each location. The aspect to keep in mind when considering these developments is that unlike CPC, which uses waste products to generate electricity, sugarcane needs to be grown on arable land, a limited and highly valuable resource.

* State-run Petrobras opens first ethanol power plant

* Petrobras, GE, hoping other governments will adopt

By Denise Luna

JUIZ DE FORA, Brazil, Jan 19 (Reuters) – Brazil on Tuesday opened the world’s first ethanol-fueled power plant in an effort by the South American biofuels giant to increase the global use of ethanol and boost its clean power generation.

State-run oil giant Petrobras (PETR4.SA)(PBR.N) and General Electric Co (GE.N), which helped design the plant, are betting that increased use of ethanol generation by green-conscious countries will boost demand for the product.

Brazil, the top global ethanol exporter, is already in talks with Japan to develop biofuels power generation there.

Read the entire article here.

Grassley: Energy bill likely in 2010; cap-and-trade unlikely

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It is a fascinating time to be alive. There are so many different directions these pieces of legislation can go, and any movement will affect our pocketbooks as well as larger issues of the environment and resource availability for generations to come. As Grassley begins what could be a tough fight with Democratic candidate Roxanne Conlin, it will be very interesting to hear what the people of Iowa, an agricultural state with strong interest in these matters, have to say about them.

By Michael O’Brien – 01/12/10 11:49 AM ET

The Senate will move on energy and environmental issues in 2010, but not cap-and-trade legislation, Sen. Chuck Grassley (R-Iowa) asserted Tuesday.

Grassley said that the Senate is likely to take up an energy bill, perhaps including a renewable electricity standard, but not the controversial emissions reduction system approved last year by the House but left undone by the Senate.

“I think you can expect everything but cap-and-trade,” Grassley said in a conference call with agricultural reporters. “I think it’s fair to say that there will be an energy bill taken up.”

Read the entire article here.

Why farms may be the new forests

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Yet another Economist article that falls right in line with my PhD dissertation. One of us might be on to something.

Healthy ecosystems, such as forests, on or bordering agricultural land helps water and nutrient cycling, reducing the need for irrigation and chemical fertilizers. The enhanced biodiversity also acts as natural resistance to pests. The trick is paying farmers to keep forests on their land, compensating them for the loss of revenues from the crops that would have been planted on that land. These forests perform ecosystem services that greatly benefit society as a whole, economically and in terms of human and ecological health. Paying farmers helps to internalize those positive externalities.

Dec 30th 2009
From The Economist print edition

In the war against climate change, peasants are in the front line

 Into battle in the eco-war

FOR people who see stopping deforestation as the quickest climate-change win, Copenhagen seemed a success. Although there is still work to be done on the initiative known as REDD (Reducing Emissions from Deforestation and Forest Degradation), the deal struck in Copenhagen made it into a real thing, not just an idea. The notion of reducing net deforestation to zero was not explicitly mentioned, but it looks much more credible than it did two years ago.

As well as giving heart to the protectors of trees, this outcome is encouraging for people whose focus is not on forests but on fields. Climate and agriculture matter to each other in several ways. On the downside, farming is a cause of deforestation, and also emits greenhouse gases in its own right—perhaps 14% of the global total. On the upside, agriculture can also dispose of heat-trapping gases, by increasing the carbon content of soils.

Read the entire article here.

Written by Jason

December 31st, 2009 at 12:06 pm

Secretaries Chu and Vilsack Announce More Than $600 Million Investment in Advanced Biorefinery Projects

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December 04, 2009

U.S. Department of Energy Secretary Steven Chu and Agriculture Secretary Tom Vilsack today announced the selection of 19 integrated biorefinery projects to receive up to $564 million from the American Recovery and Reinvestment Act to accelerate the construction and operation of pilot, demonstration, and commercial scale facilities. The projects—in 15 states—will validate refining technologies and help lay the foundation for full commercial-scale development of a biomass industry in the United States. The projects selected today will produce advanced biofuels, biopower, and bioproducts using biomass feedstocks at the pilot, demonstration, and full commercial scale. The projects selected today are part of the ongoing effort to reduce U.S. dependence on foreign oil, spur the creation of the domestic bio-industry, and provide new jobs in many rural areas of the country.

“Advanced biofuels are critical to building a cleaner, more sustainable transportation system in the U.S.” said Secretary Chu. “These projects will help establish a domestic industry that will create jobs here at home and open new markets across rural America.”

Read the entire article here.

Written by Jason

December 5th, 2009 at 8:22 am

Monsanto: The parable of the sower

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Merely mentioning the name “Monsanto” in certain circles will illicit a range of responses, from admiration and gratitude, to unadulterated acrimony. Having had the pleasure of knowing some of their executives in the U.S. and Brazil, I can say that they are decent, intelligent people who truly believe that they are making great strides towards feeding an ever-growing global population. Many around the world will agree. Others, especially small farmers, will say that their pursuit of intellectual property rights, combined with their substantial market power, is making it very difficult for those who lack capital for investments to survive in an increasingly industrialized agricultural system. This fence is really digging into my backside.

Monsanto has recently pledged to increase corn yields to as much as 300 bushels per acre by the year 2030 (read about it here).  This would mark an increase of about 100% from present yields. While this may be a noble pursuit on its surface, there are two points of contention that merit discussion: 1. The negative environmental externalities in this effort may outweigh the benefits; and 2. I still hold to the notion that we do not face a food production problem, but a food distribution problem.

Having that much biomass sprout from the soil may deplete it in ways that vastly decrease yields in a mere generation, possibly two. The fertilizers required for such an effort have already had devastating effects[1]. Doubling yields will mean much more nitrogen runoff into the the Mississippi Basin, the Gulf of Mexico, and other places where such production methods are employed. And since, as Donner and others[2] make clear, most of the corn grown in the U.S. goes either to cattle feed or ethanol, it is difficult to see how this can help to feed a growing population. Yes, I like my cheeseburgers, but there is a vast difference, ecologically and in terms of human health, between eating meat once or twice a week, versus every day. Eating lower on the food chain, especially in the developed North, can go at least as far towards helping more equitable distribution of the global food supply as increasing yields, and without the negative side effects.

Between those externalities and the costs of research and development of the sort Monsanto proposes, this is not an efficient way to provide the food our population needs.

The parable of the sower

Nov 19th 2009 | ST LOUIS
From The Economist print edition

The debate over whether Monsanto is a corporate sinner or saint

FEW companies excite such extreme emotions as Monsanto. To its critics, the agricultural giant is a corporate hybrid of Victor Frankenstein and Ebenezer Scrooge, using science to create foods that threaten the health of both people and the planet, and intellectual-property laws to squeeze every last penny out of the world’s poor. The list of Monsanto’s sins dates back to when (with other firms) it produced Agent Orange, a herbicide notorious for its use by American forces in Vietnam. Recently “Food Inc”, a documentary film, lambasted the company.

To its admirers, the innovations in seeds pioneered by Monsanto are the world’s best hope of tackling a looming global food crisis. Hugh Grant, the firm’s boss since 2003, says that without the sort of technological breakthroughs Monsanto has achieved the world has no chance of doubling agricultural output by 2050 while using less land and water, as many believe it must. Mr Grant, of course, would say that. But he is not alone. Bill Gates sees Monsanto’s innovations as essential to the agricultural revolution in Africa to which his charitable foundation is committed. Josette Sheeran, the head of the United Nations World Food Programme, is also a fan.

Monsanto has come a long way from its roots in pharmaceuticals and chemicals (in which capacity it made Agent Orange). The original company was formed in 1901 to make saccharine. In 2000 it merged with Pharmacia & Upjohn, a drugmaker. Two years later the group’s agricultural activities were spun off into a new Monsanto. At that time the company was best known for Roundup, a herbicide popular with farmers. Roundup is still a leading brand, but margins have been eroded by competition from Chinese producers of other forms of glyphosate weedkiller. Roundup’s share of Monsanto’s revenue is shrinking towards 10%. There is talk that it might be sold. “It is no sacred cow. We look at it every year,” says Mr Grant.

Read the entire article here.


[1] Donner, S. (2007). “Surf or Turf.” Global Environmental Change. 17:105–113

[2] Such as Smil, V. (2002). Nitrogen and food production: proteins for human diets. Ambio. 31:126– 131.

Written by Jason

November 19th, 2009 at 12:17 pm

How to feed the world

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As evidenced by the other comments on this site about their articles, I very much respect and enjoy The Economists’ coverage of the news, particularly food, energy, and environmental issues. But I take exception to this week’s article on how to feed the world for a couple of minor issues and one major disagreement. The minor issues are the reasons they fail to consider in the spike in food prices in 2007-2008. Most leading analysts[1] pointed to five factors that caused this spike: The high price of oil; several poor harvests from major grain providers such as Australia and Russia; the increasing income in places like China and India, leading to more food consumption, particularly meat, which is much more resource intensive; the increasing use of food and agricultural land to produce biofuels; and the declining U.S. dollar. The Economist described the first four in an article last year, but did not include the devaluation of the dollar. In this week’s article, they state, “None of the underlying agricultural problems which produced a spike in food prices in 2007-08 and increased the number of hungry people has gone away.” But oil prices have fallen considerably and this year’s harvests were much better, as they even point out a few sentences later. But this is nit-picking, especially given the fact that oil prices will likely indeed rise again, and several ecological issues threaten global harvests even more severely in the coming decades.

Slightly larger problems exist in the explanation of lack of research into agricultural productivity. It’s true that public expenditures have been on the decline, but much of this is due to trade liberalization and attempts at having private industry            provide services once offered by government. So the reduced government spending is true, but a bit of a half truth. The decline in productivity gains could also be a sign that we are maxing out the potential in soil for those grain crops we have been breeding and improving over generations now.

The glaring problems with the article, though, are the contradictions between calling for increased government intervention and even giving away seed while also touting free markets, and that they neglect a central truth so clearly illustrated by the Nobel Prize winning economist, Amartya Sen: There is not a food production problem; there is a food distribution problem[2]. In the case of the former, it’s difficult to reconcile those two, at least the way it’s explained here.

Nov 19th 2009
From The Economist print edition

Business as usual will not do it

IN 1974 Henry Kissinger, then America’s secretary of state, told the first world food conference in Rome that no child would go to bed hungry within ten years. Just over 35 years later, in the week of another United Nations food summit in Rome, 1 billion people will go to bed hungry.

This failure, already dreadful, may soon get worse. None of the underlying agricultural problems which produced a spike in food prices in 2007-08 and increased the number of hungry people has gone away. Between now and 2050 the world’s population will rise by a third, but demand for agricultural goods will rise by 70% and demand for meat will double. These increases are in a sense good news in that they are a result of rising wealth in poor and middle-income countries. But they will have to happen without farmers clearing large amounts of new land (there is some scope for expansion, but not much) or using up lots more water (in parts of the world, water supplies are stretched to their limit or beyond). Moreover, they will take place while farmers also wrestle with the consequences of climate change, which, on balance, will do more harm than good to farmland round the world.

Read the entire article here.


[1] Such as Abbott, P.C.; C. Hurt, and W. E. Tyner. “What’s Driving Food Prices?” Farm Foundation Report, March, 2009.

[2] Sen, A. “The Ingredients of Famine Analysis.” Qtrly Jrnl of Economics, 1981.

Written by Jason

November 19th, 2009 at 6:01 am