In 2006 I attended a BIO meeting in Toronto focused on the new bio-based economy. Oil had just risen to $70/barrel and it was a time when environmental NGOs, biotech companies and even oil companies seemed to be on the “same page” in terms of their enthusiasm for moving to plant-based feedstocks as the perfect alternative to oil dependency. With the very obvious international security costs of the oil economy, and what were then thought to be unimaginable energy costs, it was a remarkable sort of celebration event for all the alternative energy and materials folks who has suffered under the decades of cheap oil. As much as I was happy to see such “multi-stakeholder” agreement, I was sad because anyone with an agricultural perspective could see a train-wreck coming.
People were making presentations about cool second generation innovations like “Cellulosic” ethanol from sources like switchgrass or Miscanthus and also about ethanol alternatives like butanol. People were talking about bio-materials for even things like the auto industry. However; the side conversations were about the huge boom underway in the corn ethanol industry. Orders for stainless steel tanks were back-logged two years. What had started as a local, farmer-cooperative funded industry had become a venture capital frenzy. I could see that long before the promise of “second generation” biofuels could be realized, corn ethanol would get to be big enough that it would end up fracturing the amazing consensus about the bio-economy that was functioning at that conference.
The Food Crisis of 2007/8
Soon (2007/8) there was an unprecedented spike in global food commodity prices. The significant diversion of food crops (corn, soy, palm oil) to biofuel got much of the blame which is exactly what I feared back in 2006. Biofuel might have deserved some blame but not nearly as much as it got. The food crisis of 2007/8 was actually a “perfect storm” that was driven by:
- Increasing world population
- Increasing standards of living in the developing world
- Unprecedented energy costs (which make fertilizer very expensive)
- Droughts in major exporting regions like Australia (Climate change?)
- Biofuel demand for food crops
There was some excellent news coverage about this in the New York Times (of all places, not exactly an Ag publication). Still, what basically never came up in the press about this situation was that when corn is used for making ethanol, 40% of the nutritional value remains after the fermentation process and becomes a high protein feed for cattle called DDGS. The famous “20%” of US corn going to ethanol was really only 12% – still significant, but not quite as disruptive as it seemed. By the way, all those factors still exist and could come back together when this recession is over.
Some Historical Perspective
Interestingly this is a very old debate. I stumbled across a paper from 1926 by E.N. Transeau that said, “The suggestion that our liquid fuels, petroleum and gasolene, may some day be replaced by alcohol made from plants is quite unreasonable. A little figuring will show that to substitute the energy of alcohol for the energy now being developed from gasolene would require all the corn now being grown in the United States.” Average corn yields in 1926 were less than 1/6 of what they are today and acreage is down, so at its peak corn ethanol might actually have been using as much corn as was grown in Transeau’s time. This proves two things: crop yields have increased dramatically and we are using a lot more transportation fuels.
The Indirect Emissions Discussion
Another argument arose against “first generation” biofuels. Searchinger et al published a paper in Science that pointed out that if biofuel demand for crops seriously competed for current supply, it drove the expansion of farm land into previously natural areas, for instance in South America. When an existing forest or grassland is converted to farmland, there is a substantial release of the carbon dioxide that had been sequestered in the soil of the natural system. Once the farm was in place there were more greenhouse gas emissions/hectare than when it was natural.
Getting global, macro-economic calculations right on this issue is certainly complicated, but the issue cannot be ignored. There is only so much farm land. If yield gains can’t keep up with growing demand for food (which will be harder in the future), there will be inevitable pressure for farming more land. Biofuels, to the extent that they compete for land, have the indirect potential to drive land-use-change.
Applying the Indirect Emissions Issue to Other Food-Limiting Decisions
What is interesting is to apply this same logic to other “land use” issues. Japan and most countries in Europe have chosen not to apply biotechnology solutions in their crops. Because of this their agricultural is less productive than it could be by a significant percentage. This is not a food supply problem for them, because they simply import more food from around the world, but in the process they are exerting more pressure for land-use change than they would if they had allowed the biotech crops. A far less significant example is that of the Organic movement. Organic farms generally have lower yields. That has always been the justification for the “Organic Premium” that is paid by the Organic consumer. Even though Organic farming uses less costly inputs in terms of fertilizers and chemicals, it needs a higher price because of it’s labor costs and it’s typically lower yields. Organic is still so small that it isn’t really a pressing issue for land-use-change, but if it were ever to be a significant part or our farming system, it would lead to land-use-change pressure.
So, flash forward to 2009 and biofuels are now virtual pariahs to some sustainability advocates. In a subsequent post I’ll talk about some trends that could hopefully restore some of the consensus we once had around this issue.
Biofuel image from TheTruthAbout…
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