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

1. Sustainability in Biofuels: Goals, Process, Place and the Case of Corn Ethanol Sean Gillon UCSC, Department of Environmental Studies Guest Lecture, Sustainability Engineering and Practice (EE 80S); October 31, 2007

2. What we’ll cover… We’ll Cover

3. What we’ll cover… -Biofuels background -Why biofuels now? -U.S. biofuels policy and strategy We’ll Cover

4. What we’ll cover… -Biofuels background -Why biofuels now? -U.S. biofuels policy and strategy -What do sustainable biofuels look like? We’ll Cover

5. 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’ll Cover

6. Not a new conversation… “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

7. Wall Street Journal (1943) Wall Street Journal (1943)

8. Where are biofuels? Source: World Resources Institute (2006)

9. 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

10. 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)

13. Renewable Fuels Standard:minimum of 7.5 BGY by 2012

14. MOREGRAPHS!

15. Corn and ethanol production

16. 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?

17. Reduced GHG emissions? Net GHG vs. Net Energy Source: Farrell et al. (2006)

18. Reduced GHG emissions?Petroleum input vs. Net Energy Source: Farrell et al. (2006)

19. Price per bbl of biofuel

20. Reduced GHG emissions? Corn Ethanol vs. Soy Diesel Source: Hill et al. (2006)

21. 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

22. 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.” - Al Hubbard, top economic advisor to Bush 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) Sources: Brasher (2007), Truitt (2007)

23. Reduced Dependence on Foreign Oil?

24. Ethanol in corn and gas markets Source: USDA (2007) FSI = food, seed & industrial uses

25. 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)

26. Rural Economic Benefits “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)

27. 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)

28. 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)

29. 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)

30. “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

31. Source: EPA (2006) RFS

32. Ethanol Refineries -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?

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

35. 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.” - Kansas resident Source: Fisher (2007)

36. Thirsty corn

37. 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).

38. Iowa acres out of CRP Source: Secchi and Babcock (2007)

39. 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)

40. 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?

41. 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

42. Questions?

43. 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