AGGREGATE EFFECTS OF EXPANDED BIOFUEL PRODUCTION: Myth & Reality C. Robert Taylor Auburn Ronald D. Lacewell Texas A&M AgriLife

Ethanol from Corn will not impact food prices TRUE: if quality cropland is limitless and/or very limited ethanol production Neither of these conditions are true: land is limited and goals for ethanol quantity are huge increased demand for corn pushes production on to marginal lands and costs increase. Price of corn and other commodities increase increases cost of corn and cost for livestock feed and will be reflected in cost of food

Dedicated Bioenergy crops as cellulosic ethanol will not affect conventional food crops Growing second generation biofuels on marginal soils avoids the fuel versus food issue The myth: assuming these crops will only be grown on marginal soils – if profitable on poor soils then much more so on prime cropland – displacing food crops Second myth: even if grown on marginal soils, production will use inputs and irrigation competing with conventional crops driving up prices for feedstock and food

Crop residues used for fuel will not affect food prices Removing crop residue takes plant nutrients and organic matter Added cost in nutrients Potential yield reduction Soil deterioration Higher input prices Higher food prices

FALLACY OF COMPOSITION True at individual unit does not necessarily extrapolate to the aggregate Paradox of thrift/saving Yield increase for individual versus nationally Extrapolating per acre crop budget data does not reflect whole farm Per acre cost for cellulosic feedstock suggests $60/ton Whole farm analysis with weather days, risk, machinery, etc., suggests $130/ton

CONCLUSIONS AND FINAL THOUGHTS TOO OFTEN POLICY DECISIONS ARE BASED ON MICRO REASONING WITH UNDESIRABLE OUTCOMES OFTEN ALL COSTS ARE NOT ACCOUNTED, FOR EXAMPLE THE ENVIRONMENTAL IMPLICATIONS OF HIGH TONNAGE DEDICATED FEEDSTOCK Extra nutrition for plant growth Irrigation requirements Externalities on water bodies Impact on transportation system (road deterioration) Net energy gain (significant energy to produce, harvest, haul, store and convert)

● Texas AgriLife BIOMASS LOGISTICS

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