Tuesday, March 23, 2010

Crops Will Provide 21st-Century Energy

Written by By Elisa Wood

As nations hunt for ways to meet their population's food needs in the future, the need to identify cleaner energy sources is also urgent. In the future, agriculture will likely meet some portion of energy needs, and various nations are pursuing this potential today.

Elisa Wood specializes in energy issues, and her work is available at www.RealEnergyWriters.com.

One partial solution to our energy problems lies not in the oilfield but in the cornfield, as nations increasingly replace some petroleum needs with bioenergy - fuel made from plants. "Energy farming" increases demand and opens vast new markets for crops: for sugar cane in Brazil, for corn and soybeans in the United States, and for other grasses, seeds, and trees in other nations.

Crop-Based Fuels in the United States

Many nations already use bioenergy to run cars and trucks, often in a mix with gasoline or diesel fuel. The two major forms of crop-based fuel used in the United States are ethanol from corn and biodiesel from soybeans.

The market for these fuels is expected to grow. As U.S. liquid-fuel needs expand over the next 25 years, bioenergy will help fill the gap, according to the U.S. Energy Information Administration. Europe, Asia, and Central and South America also rely increasingly on this resource.

Bioenergy holds special appeal because it is renewable - simply by growing agricultural crops. We cannot replenish petroleum, today's leading source of most transportation fuel. Economists say that as petroleum supplies diminish, we can expect prices to rise. Experts predict that bioenergy will serve as a 21st-century answer.

"Biofuels play a very, very major role in displacing petroleum-based fuels," says John Urbanchuk, a bioenergy specialist with LECG Consulting, an expert services consulting firm with offices worldwide. Indeed, if the United States replaced just 5 percent of today's diesel with renewable fuels, it could displace as much crude oil as it now imports from Iraq for diesel production, according to the National Biodiesel Board, which Urbanchuk advises.

"And there are other benefits as well," Urbanchuk adds. "Biofuels provide market-based revenue for farmers, which is very important. If you can provide a market-based return that reduces the amount of government support that is provided to agriculture, that money can be used elsewhere."

Corn farmers, in particular, are reaping benefits from the bioenergy boom, because of a U.S. policy to increase the amount of ethanol in the gasoline mix. The nation added more than 9 billion gallons (34 million kiloliters) of ethanol to gasoline in 2008, using 3.2 billion bushels of corn. A federal mandate will quadruple ethanol production by 2022. As manufacturers expand, they will need more corn. By 2018 ethanol production will likely account for 35 percent of U.S. corn use, according to the U.S. Department of Agriculture.

Corn makes sense as an energy crop in the United States because "we grow corn, process corn, better than anything else we do," says Urbanchuk. Corn is the nation's most widely produced feed grain, and the United States keeps finding more efficient ways to grow it. Last year, the United States produced 13.2 billion bushels, a record crop, on 5 million fewer acres (2.02 million hectares) than the previous year.

Soybeans, the main crop for biodiesel, also are grown aplenty in the United States. The nation is the world's largest producer and exporter of soybeans, with almost 400,000 farmers in 29 states growing them. U.S. sales of biodiesel fuels, blended or used in pure form, totaled 459 million gallons (1.7 million kiloliters) for 2009. As one bushel of soybeans can produce 1.4 gallons (5.3 liters) of soy-based biodiesel, farmers supplied nearly 328 million bushels of soybeans to renewable biodiesel in 2009 alone.

International Bioenergy Drive

Biofuels and wind are expected to be the fastest growing renewable energy resources in the 30 countries making up the Organization for Economic Cooperation and Development. Estimates are that India will expand biofuel use 15 percent over the next two decades, and China 10 percent. Biofuel industry growth also is under way in various South American countries.

But the United States and Brazil are the leaders, and are expected to remain so. The two countries produce 70 percent of the world's bioenergy. While the United States produces more ethanol, Brazil is often described as the first biofuel economy. Backed by substantial government investment, Brazil for three decades has been perfecting production of ethanol from sugar cane. No cars in Brazil run on pure gasoline anymore. The government requires that all vehicles run on blended fuel of about one-quarter ethanol. Brazil produced about 25,000 kiloliters of ethanol in 2008, and exported about 15 percent. Whether Brazil's success can be replicated remains a source of debate, given that few parts of the world have a climate and land mass so well suited for cultivating sugar cane.

In developing nations, biofuels already are commonly used, but as sources of domestic heating and cooking. Markets for biofuel crops have not developed, so they are not a source of revenue. That could change, however, given that several developing nations offer vast untapped bioenergy potential, according to "Certification Strategies, Industrial Development and a Global Market for Biofuels" a study by the Belfer Center for Science and International Affairs at Harvard University's Kennedy School of Government.

While bioenergy could provide poor rural areas with a foundation for new agricultural industries, real challenges remain. Stable government is required to attract the investors and the capital to build the necessary infrastructure. Biofuel production requires refineries to make the fuel, cars that can use the fuel, and transportation facilities to bring the fuel to market.

Further, while ethanol is a cost-competitive fuel, at about $60/barrel, the export market for biofuels "is being shaped haphazardly by a series of different and sometimes conflicting" government policy goals, the Belfer Center report says. For example, when developed countries restrict imports to protect their own farmers' profits, they make it more difficult for newcomers to enter the market. Still, the study sees potential for production and export of sugar-cane ethanol in Suriname, Guyana, Bolivia, Paraguay, the Democratic Republic of Congo, and Cameroon.

Most important, a nation must achieve food security before it channels agricultural resources into energy, says the report. Indeed, even in the United States, worries exist about the impact of biofuels on the food supply. During the food-price hikes of 2007-2008, biofuels were named a major culprit by groups such as the Earth Policy Institute. The use of corn for fuel increased demand for the crop, the Institute asserted, driving up prices for food uses as well. In retrospect, the U.S. Congressional Budget Office concluded that the diversion of corn to ethanol production affected food prices only minimally, accounting for between 0.5 and 0.8 percentage points of the 5.1-percent increase in the price of food. Other factors, such as skyrocketed energy costs, played a larger role in the food-price spike, according to that office. But it is important for bioenergy advocates to address the perception that biofuels mean higher food costs. Many point out that not all of the grass or bean goes toward fuel. Meal and other byproducts are extracted for livestock feed and other purposes.

What's Next?

While corn and soybean demand is expected to remain solid, other crops now in various stages of development will compete for use in biofuel production. For example, researchers at the University of Idaho's College of Agriculture and Life Sciences see strong possibilities for mustard seed, canola, and rapeseed. Mustard seed can serve a dual purpose: the oils can be made into biodiesel, and the pungent meal into a pesticide that can be spread on farmland, says Jack Brown, professor of breeding and genetics at the University of Idaho.

Biofuels are not expected to displace petroleum entirely. But even if they only reduce petroleum use by a small amount, analysts expect their presence to put downward pressure on prices. In the case of biodiesel, Brown urges the farm industry to replace all of its petroleum-based fuel needs with biodiesel products. Tractors and trucks should be run on farm-grown fuels, he says, not only to support the industry, but also to protect farmland from pollutants emitted by petroleum. This would have a small but significant impact on petroleum use - agriculture makes up just over 1 percent of U.S. gross national product. "Even if biodiesel became everything we want it to be, it would still produce only [a] small quantity of the fuel we need in this country. That is why biodiesel should not be used by Mrs. McGuinty to take her kids to school or by a ritzy California star. It should be used in environmentally sensitive areas," Brown says.

Work also is underway to make biofuels from more exotic raw materials: algae, castor oil, coffee grinds, microbes, feather meal, salmon oil, tobacco, and other various grasses, seeds and trees. Hollywood stars publicize their use of biofuels made from restaurant greases left over from fast food frying. Such substances, though, have limited range because of their tendency to freeze, and can only be made available in small quantities.

Meanwhile, the aviation industry is moving into biofuels. Boeing, the Mexican Airports and Auxiliary Services Agency, and Honeywell have teamed up to find ways of using Mexican crops for biofuel. In the United States, the shipping company FedEx has pledged that a third of its fuel will come from bioenergy by 2030. Bioenergy also is being used in power production, mostly at small generating plants. One area of promise is the co-firing of bioenergy and coal. The power plant uses coal part of the time, keeping costs low, and bioenergy the remainder of the time to improve the power plant's environmental profile.

Worldwide demand for biofuel is projected to grow 8.6 percent annually through 2030. Achieving this depends on government support, since biofuels, like most renewable energy sources, still rely on financial incentives. In the United States, for example, a federal standard mandates an increase in the biofuel mix in gasoline to almost 36 billion gallons (136 million kiloliters) by 2022. In addition, the Obama administration has committed $80 million to advanced biofuels research.

Given this kind of support, coupled with the push for oil alternatives, bioenergy injects new vigor and livelihood to the very old business of farming. The agricultural industry, already responsible for products that are used to create food, clothing and material for shelter, is now firmly in the business of providing another necessity: the energy to make it all work.

The opinions expressed in this article do not necessarily reflect the views or policies of the U.S. government.

(This is a product of the Bureau of International Information Programs, U.S. Department of State)