Sustainability in Biofuels: Goals, Process, Place and the Case of Corn Ethanol

Sean GillonUCSC, Department of Environmental StudiesGuest Lecture, Sustainability Engineering and Practice (EE 80S); October 31, 2007

We’ll Cover

What we’ll cover…

We’ll Cover

What we’ll cover…

-Biofuels background

-Why biofuels now?

-U.S. biofuels policy and strategy

We’ll Cover

What we’ll cover…

-Biofuels background

-Why biofuels now?

-U.S. biofuels policy and strategy

-What do sustainable biofuels look like?

We’ll Cover

What we’ll cover…

-Biofuels background

-Why biofuels now?

-U.S. biofuels policy and strategy

-What do sustainable biofuels look like?

-The Case of Corn Ethanol: Place and Scale in Environmental Governance

-Conclusions

“We can get fuel from fruit, from that shrub by the roadside, or from apples, weeds, saw-dust—almost anything! There is fuel in every bit of vegetable matter that can be fermented … And it remains for someone to find out how this fuel can be produced commercially — better fuel at a cheaper price than we know now.”

~ Henry Ford, 1925

Not a new conversation…

Wall Street Journal (1943)

Wall Street Journal (1943)

Where are biofuels?

Source: World Resources Institute (2006)

What are sustainable biofuels?• What do we want biofuels for? • Who can biofuels benefit? • Where do we want them produced? Keep these questions in mind throughout - we’ll discuss at the end

Why “Renewable Fuels” in the US Now?

• Tax credit to gas blenders ($0.51/gal ) extended through 2010

• $0.54/gal import tariff (Brazil)

• Energy Policy Act of 2005 and the EPA’s Renewable Fuels Standard: 7.5 BGY by 2012

• Farm Bill now has an ‘Energy Title’

• State-level Initiatives

• Funding (DOE, USDA, private industry)

Renewable Fuels Standard:

minimum of 7.5 BGY by 2012

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MOREGRAPHS!

Corn and ethanol production

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Where are we going with this? Goals / Benefits Promoted: • Reduce GHG emissions• Reduce dependence on foreign oil• Benefit to rural economies

…and where is the sustainability?

Reduced GHG emissions?Net GHG vs. Net Energy

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Source: Farrell et al. (2006)

Reduced GHG emissions?

Petroleum input vs. Net Energy

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Source: Farrell et al. (2006)

Price per bbl of biofuel

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Reduced GHG emissions?

Corn Ethanol vs. Soy Diesel

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Source: Hill et al. (2006)

Reduced GHG emissions?

Cellulosic?

• Lower inputs, potential for habitat creation as well as increased diversity and soil restoration

• Again, the technology isn’t there

• Neither are the production systems

Reduced dependence on foreign oil“Not only would we all pay less for gasoline, but more important, Venezuela and Iran would no longer be making the kind of money they are today to fund our enemies.”

There is a security threat inherent in the fact that “…eighty percent of the world’s oil supply is controlled by governments.” Ethanol’s critics should recognize that “we are talking about the ability of our country to continue on the lifestyle to which we are accustomed.”

- Sen. Richard Lugar (R-IN)

- Al Hubbard, top economic advisor to Bush

Sources: Brasher (2007), Truitt (2007)

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Reduced Dependence on Foreign Oil?

Ethanol in corn and gas markets

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Source: USDA (2007) FSI = food, seed & industrial uses

Place Matters

“Nowadays, I think [Iowa voters] kind of expect people to be for ethanol – whether they’re newly born-again ethanol people, or old-fashioned, long-term ethanol people”

- Senator Charles E. Grassley (R-IA)

Source: Murray (2007)

“It seems like a farmer gets one or two homeruns in his career. Is this our homerun? I think so.”

-Iowa corn grower

“Four-dollar corn is a bad thing - write that down.”

-Minnesota corn grower

Sources: Paulson (2007), Birger (2007)

Rural Economic Benefits

"In the last three years, my expenses have gone up about 50 percent. There's so much more invested and at risk. You can't control the weather or the market …it's a lot more stressful.”

-Wisconsin corn grower

Source: Duwe (2007)

Rural Economic Benefits

Livestock Producers“We’re subsidizing corn ethanol and we don’t need to do that…Where I live you can’t buy corn…It’s all contracted for sale to ethanol plants. You can’t raise pigs without feed.”

-Nebraska pork producer

Source: Perkins (2007)

Livestock Producers"This ethanol binge is insane … This talk about energy independence and wrapping yourself in the flag and singing God Bless America—all that's going to come at a severe cost to another part of the economy.”

- NCBA President

Source: Herbst (2007)

“Someone has to stop building ethanol plants or I suspect margins will remain fairly depressed … we are already building too many ethanol plants for [the] economics to make sense.”

-Credit Suisse Financial Services Group

Quote Source: Haddadin 2007

Source: EPA (2006) RFS

-Ethanol plants go to cheap corn, which soon becomes expensive corn

-More corn is grown with numerous adverse environmental impacts

-Ethanol plants themselves also bring social and environmental burdens

-water consumption increases, railroads are expanded, air pollution often increases, energy consumption increases (sometimes onsite coal-firing or derived from coal)

-communities often offer enormous tax incentives to attract refineries

-Large-scale industry consolidation is likely

…what else could the Midwest do?

Ethanol Refineries

Country/year Rural UrbanEthiopia, 1999

Food

Energy

69.510.4

63.87.7

Bangladesh, 2000

Food

Energy

65.69.3

60.19.4

Guatemala, 2000

Food

Energy

50.51.3

47.61.3

Tajikistan, 2003

Food

Energy

70.74.9

73.74.2

Food & Energy Expenditure Shares(for $1/day poor) Source: IPRI (2007) cited in Ahmed et al (2007)

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Agroecology and the production of corn

“Frankly we’re not so much worried about this plant using 1.5 million gallons [or 4.6 acre feet] of water a day, even though we live in a semi-arid area … we’re worried about the corn.”

Source: Fisher (2007)

- Kansas resident

Thirsty corn

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Environmental Stewardship?The projected 4.5 million acre increase

in corn production threatens to “erase some of the gains of the last 20 years of Farm Bill and Clean Water Act implementation” (EPA 2006).

Iowa acres out of CRP

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Source: Secchi and Babcock (2007)

Negotiations - scaling up?“I respectfully request that agriculture’s role in fighting climate change be made a major new focus of the next farm bill.”

- Native prairies, carbon sequestration, cellulosic ethanol?

-Sen. Klobuchar (D - MN)

What is sustainability in biofuels?

• What do place and scale matter? – Ecological, social, economic,

institutional, and political variation

• Can we develop goals?

• How to approach the uncertainty?

Summary• Current biofuels policy has a ways to go toward

sustainability

• Sustainability will be different across regions but goals can be established

• Process matters - there are no obvious answers and there are many interests

• Be engaged with the conversation

Questions?

Biofuels Funding

• USDA and DOE research grants and industry funding

• Fastest growing sector in ‘clean’ tech investment

• Large private industry grants to public research institutions