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Opportunities and Challenges of Expanding Agriculture’s Contribution to the Energy Supply

Opportunities and Challenges of Expanding Agriculture’s Contribution to the Energy Supply. Daniel G. De La Torre Ugarte University of Tennessee. Objectives. Assess the feasibility and impacts of a significant expansion of bioenergy sector. Identify the opportunities and challenges.

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Opportunities and Challenges of Expanding Agriculture’s Contribution to the Energy Supply

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  1. Opportunities and Challenges of Expanding Agriculture’s Contribution to the Energy Supply Daniel G. De La Torre Ugarte University of Tennessee

  2. Objectives • Assess the feasibility and impacts of a significant expansion of bioenergy sector. • Identify the opportunities and challenges.

  3. Renewable Energy Feedstocks

  4. Renewable Energy Feedstocks From Agriculture

  5. Hypothetical Ethanol Demand 50 Billion

  6. Assumptions for a Potential Outlook • Yields: • Major crops continue w/ trend line • Energy crops (6 to12 dt/acre) • Farm practices:Increase use of no-till and reduced till • Land: Use cropland only • Baseline:Extended 2005 USDA Baseline • Commodity Programs:as specified in 2005

  7. Feedstock for Energy* * Does not include forest harvest

  8. Other Cropland in Pasture Hay Energy Crop Wheat Soybeans Corn Land Use2006, 2015, and 2020 (million acres)

  9. Average Commodity Prices

  10. Distribution of the Production of Cellulosic Materials, 2010 Tons

  11. Distribution of the Production of Cellulosic Materials, 2020 Tons

  12. Changes in Net Returns and Government Payments(million $)

  13. The Opportunities • Agriculture can face a long period of sustain expansion in demand. • Bio-energy feedstocks could be a new $12 billion industry (net returns). • Great potential for rural development • Savings in government payments of $6 to $50 billion.

  14. Key Challenges • Food Security • Transformation of industrial livestock production • Positive contribution to food security • Environmental • Sustainable feedstock production • Protection of tropical forests • Social • Who will accrue the benefits of the “new ethanol industry”? What benefits for Rural America? • What role for international trade?

  15. Conclusions • America’s agriculture can play a key role in energy supply without impacting food security • An expanding Bioenergy industry could produce: • Increased Farm Income • Reduced Government Payments • Increased Rural Economic Development • Enhanced Environmental Benefits • Reduction in Foreign Oil Dependency • HOW this potential is pursued matters: social and environmental impacts

  16. Agricultural Policy Analysis Center http://agpolicy.org/ Bio-based Energy Analysis Group http://beag.ag.utk.edu/ Department of Agricultural Economics, Institute of Agriculture University of Tennessee http://www.agriculture.utk.edu/

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