The Biofuel Revolution: Implications for CGIAR

1
The Biofuel Revolution Implications for CGIAR
Public Goods Research Kenneth G. Cassman,
Director Nebraska Center for Energy Sciences
Research University of NebraskaLincoln www.ncesr.
unl.edu
2
Mega Trends

• Rapid rate of economic growth in most populous
  developing countries
• Per capita increases in consumption of energy and
  livestock products
• Climate change and increasing public concern
  about protection of environmental quality and
  natural resources
• Uncertainty of petroleum supply
• Political instability in oil-producing countries
• Decreasing replacement of petroleum reserves
• Rising petroleum and motor fuel prices

3
Energy Consumption and Income are Linked
5 billion low-income people in countries with
rapid economic growth rates
4
Oil Production vs Oil Discovery
5
Response to Rising Petroleum Prices

• Increased public and private sector investment in
  expansion of first generation biofuels
  production capacity from starch, sugar, and
  oilseed crops
• Convergence of energy and agriculture
• Highest value use of these crops is now as a
  biofuel feedstock, not as food or livestock feed
• Rapid rise in crop commodity prices and spillover
  to non-biofuel crops and forages
• Expansion of biofuel crop area
• Abrupt change from 50 years of supply-dominated
  crop commodity markets to demand-driven markets

6
Ethanol feedstock is now the highest value use
for maize. Breakeven maize price versus ethanol
price current CBOT ethanol price is about
1.80/gallon (0.48/L). Assumes US10/Mbtu for
natural gas.
Current ethanol price justifies corn price of
3.90/bu (154/metric ton)
Natural gas _at_ 6 per Mbtu and current ethanol
price justifies corn _at_ 4.25/bu (167/metric
ton)
7
(No Transcript)
8
Expansion of Biofuel Production is a Global
Phenomenon

• Brazil tremendous capacity to increase ethanol
  production from sugarcane, biodiesel from soybean
  and perhaps oil palm
• Indonesia/Malaysia rapid expansion of biodiesel
  from oil palm (perhaps also Nigeria and DR-Congo)
  
• Europe and Canada expansion of biodiesel from
  canola

9
Gross Energy Yield of Various Biofuel Crops
Crop Country Yield Biofuel Energy
    Mg/ha L/ha GJ/ha
Oil Palm-BD Malaysia 21 5920 195
Oil Palm-BD Indonesia 18 5115 168
Sugarcane-E Brazil 74 5865 124
Sugarcane-E India 61 4844 102
Maize-E US 9 3751 79
Maize-E China 5 1995 41
Rapeseed-BD China 2 726 24
Rapeseed-BD Canada 2 641 21
Soybean-BD US 3 552 18
Soybean-BD Brazil 2.4 491 16
10
Biofuel crops are highly concentrated in a few
countries

• Argentina Brasil USA account for
• 48 of global maize production 65 of maize
  exports
• 81 of global soybean production
• Indonesia Malaysia account for 81 global oil
  palm production
• Brasil produces 33 of global sugarcane
• USA accounts for 56 of global humanitarian food
  aid

11
Promise of the Biofuel Boom

• Most exciting opportunity for agriculture since
  WWII
• Economic development and jobs in rural
  communities in developed and developing countries
• Substantial increases in prices for agricultural
  commodities
• Higher land value and tax income
• Less need for direct crop subsidies

12
Biofuel Pitfalls

• Energy inefficient biofuels that require more
  energy inputs than energy output reduces
  capacity for replacement of fossil fuels
• Excessive rise in consumer food prices due to
  insufficient grain and oilseed crops for food,
  feed, fiber, and biofuel
• Environmental degradation and unsustainable
  farming practices due to expansion of biofuel
  crop area and motivation to produce highest
  possible yields
• Net increases in greenhouse gas emissions rather
  than a decrease
• Expansion of cropping to marginal land resulting
  in a significant increase in erosion and habitat
  degradation
• Expansion of cropping into rain forests,
  wetlands, grassland savannahs in Brazil,
  Indonesia, and other tropical countries
• Reduction in water quality from increased
  fertilizer rates without development of new
  technologies to avoid nutrient losses in
  high-yield systems

13
Energy Efficiency and Environmental Impact of
BiofuelsMaize Ethanol

• There are many life-cycle analysis (LCA) studies
  of maize-ethanol systems
• Includes crop production, ethanol conversion,
  co-product processing and utilization
• Results vary depending on selection of system
  boundaries, energy content of crop inputs, crop
  yields and input levels, energy use in ethanol
  plant

14
Energy efficiency and greenhouse gas mitigation
estimates from different studies
From Farrell et al., Science 2006
15
Backward-looking vs forward-looking life-cycle
analyses

• Previous studies use aggregate data from the
  recent past
• But efficiencies of maize production and ethanol
  conversion are continually improving
• More relevant question what is the energy
  efficiency and greenhouse gas mitigation
  potential of current and future maize-ethanol
  systems?

16
Biofuel Energy Systems Simulator (BESS)

• Recently released life-cycle assessment software
  available at www.bess.unl.edu
• Uses updated input values for maize yields and
  production practices, energy requirements for
  ethanol fermentation-distillation, and co-product
  processing and utilization
• Estimates much higher net energy efficiency and
  greenhouse gas mitigation potential than previous
  estimates

17
Tradable GHG credit (E) A - B - C - D
C energy savings from use of distillers grains
co-product to replace corn grain and urea in
cattle diets
18
(No Transcript)
19
(No Transcript)
20
(No Transcript)
21
(No Transcript)
22
BESS life-cycle analysis Net Energy Ratio
-----Corn Production System-----
Type of ethanol plant USA average NE average Iowa average Advanced Irrigated
Coal, dry DG 1.39 1.33 1.52 1.42
natural gas, dry DG 1.47 1.41 1.62 1.51
natural gas, wet DG 1.80 1.71 2.03 1.85
closed-loop facility 2.36 2.20 2.78 2.45
Based on a 378 ML/yr maize-ethanol plant
23
BESS LCA Analysis GHG Emissions Reduction (, Mt
CO2eq)
-----Corn Production System-----
Type of ethanol plant USA average NE average Iowa average Advanced Irrigated
Coal, dry DG 26, 197,817 36, 270,668 46, 342,359 39, 294,171
natural gas, dry DG 51, 381,213 61, 454,064 70, 525,756 63, 477,567
natural gas, wet DG 60, 447,462 69, 520,313 79, 592,004 73, 543,816
closed-loop facility 67, 504,269 77, 577,120 87, 648,812 80, 600,623
Based on a 378 ML/yr maize-ethanol plant
24
Energy efficiency and greenhouse gas mitigation
estimates from different studies
Liska et al. Univ of Nebraska Improved maize
grain ethanol technology
From Farrell et al., Science 2006
25
Closed-Loop Integrated Corn-Ethanol
Biorefinery high energy efficiency and positive
environmental impact
CH4
N2O
CO2
Corn Production --Grain and stover yields in
relation to climate and management --All inputs
and outputs have energy and GHG
equivalents --Soil C sequestration, soil quality,
water quality
CO2
Ethanol Plant --Ethanol output per in relation to
grain and energy inputs, and total ethanol
yield --Greenhouse emissions --Distillers grains
and other by-products
Grain
Ethanol
Grain
NO3 leaching
Distillers grain
Stillage
N2O
CH4
CH4
CO2
Cattle Feedlot --Feed, energy and other
inputs --Animal weight gain and feed
efficiency --Manure and urine outputs
--Greenhouse gas emissions
Methane Biodigestor --Manure, urine, stillage
inputs --Methane biogas output --Biofertilizer
output, fertilizer replacement value, land
requirement
Meat
manure, urine
NO3 leaching
Biofertilizer
Horticultural uses/organic ag?
Fertilizer offset in crop production
26
BESS LCA Analysis GHG Emissions Reduction (, Mt
CO2eq)
-----Corn Production System-----
Type of ethanol plant USA average NE average Iowa average Advanced Irrigated
Coal, dry DG 26, 197,817 36, 270,668 46, 342,359 39, 294,171
natural gas, dry DG 51, 381,213 61, 454,064 70, 525,756 63, 477,567
natural gas, wet DG 60, 447,462 69, 520,313 79, 592,004 73, 543,816
closed-loop facility 67, 504,269 77, 577,120 87, 648,812 80, 600,623
Based on a 378 ML/yr maize-ethanol plant
27
Bottom line Energy Efficiency and GHG Mitigation

• Current state-of-the-art USA maize ethanol
  systems
• 30-70 net energy surplus and 25-70 GHG
  reduction compared to gasoline
• Sugarcane-ethanol even better
• Improvements in maize-ethanol will approach
  sugarcane efficiencies and GHG mitigation
• Palm oil biodiesel is also highly energy
  efficient, but GHG mitigation depends on whether
  forest clearing is accounted for
• Soybean will become the dominant vegetable oil
  crop because it is too low-yielding to be
  competitive as a biofuel feedstock

28
Potential Ripple Effect accelerated
deforestation due to abrupt increase in demand
for food, feed, and biofuel crops
29
Ripple effect of rising food prices or shortages
rural poor in developing countries will be
motivated to expand subsistence crop production
onto marginal soils not suited for annual food
crops causing soil degradation and loss of
environmental services.
30
Cereal Imports to Sub-Sahara Africa
Wheat
Percent of global exports
Rice
Maize
31
Avoiding excessive food price increase and
ensuring environmental protection

• Assure adequate grain and oilseed supply to meet
  global demand for food, feed, fiber, and biofuel
• Maintain soil quality
• Improving water quality
• Avoid a large expansion of crop area into
  marginal land or into natural ecosystems
  (forests, wetlands, grassland savannahs)

32
(No Transcript)
33
Trends in Global Area Planted to Cereals is
decreasing, 1966-2004
34
(No Transcript)
35
Global Cereal Yield Trends, 1966-2004
36
Rate of gain for all cereals is linear, not
exponential, which means that the relative rate
of gain is decreasing relative rates of gain in
1966.
37
Rate of gain for all cereals is linear, not
exponential, which means that the relative rate
of gain is decreasing relative rates of gain in
2004.
38
A Critical QuestionWill there be enough maize?

• USDA Secretary Mike Johanns (11/16/06)
• US farmers should be able to meet booming corn
  demand
• We have companies telling us they are very close
  in their research to having more
  drought-resistant, more pest-resistant, more
  disease-resistant corn hybrids
• 4 to 7 million idled CRP acres are viable for
  corn production
• Robert Fraley, Chief Technology Office, Monsanto
  National Renewable Energy Conf, St Louis,
  10/12/06
• Average corn yields will double within the next
  30 years (2.3 per year exponential growth rate
  versus actual current linear rate equal to 1.2
  of current trend-line yield)
• New biotech hybrids will achieve substantial
  yield increases under drought and require less N
  fertilizer
• Little published in refereed journals to support
  these claims most crop physiologists/agronomists
  who work on corn yield potential disagree with
  this prognosis

39
From Convergence of Energy and Agriculture,
www.cast-science.org
40

• WILL THERE BE ENOUGH RICE, WHEAT, AND OTHER
  STAPLE FOOD CROPS FOR THE RURAL AND URBAN POOR?

41
(No Transcript)
42
Grain yield of IR8 grown in the late 60s and 1998
Peng et al. 1999 Crop Sci 391552
43
Conceptual framework for stagnant yield potential
and red-queen breeding to maintain disease/insect
resistance and adaptation to evolving
agro-ecosystems (soils, CO2, climate change)
From Cassman et al., 2003, ARER
44
Rice yields are stagnating in many of the worlds
most productive intensive rice systems China,
Korea, Japan, Indonesia, and Punjab-India
45
Yield trends of wheat in the Yaqui Valley of
Mexico and in the major wheat producing states in
India.
46
Global Irrigated Area and as a of Total
Cultivated Land Area 1966-2004 little scope for
further increase
In 2002, irrigated systems occupied 18 of
cultivated land area but produced 40 of human
food supply
47
Need for Ecological Intensification

• Little uncultivated land suitable for expansion
  of intensive cereal production
• Global rate of increase in cereal yields is
  falling below rate of increase in demand
• In general, current crop and soil management
  practices have
• negative impact on water quality, greenhouse gas
  emissions, and biodiversity
• In some systems, they are also causing a
  reduction in soil quality (loss of organic
  matter, nutrient depletion, salinization,
  acidification)

48
What is Ecological Intensification?

• Development of high-yield crop production systems
  that protect soil and environmental quality and
  conserve natural resources
• Characteristics of EI systems
• Yields that reach 85-90 of genetic yield
  potential
• 70-80 N fertilizer uptake efficiency
• Improve soil quality (nutrient stocks, SOM)
• Integrated pest management (IPM)
• Contribute to net reduction in greenhouse gases
• Have a large net positive energy balance
• In irrigated systems 90-95 water use efficiency

49
The Promise of Cellulosic Ethanol

• Mostly avoids direct food vs fuel competition
• Indirect competition for land
• Large amount of cellulosic biomass feedstock
  could support substantial expansion of ethanol
  production capacity
• May have greater positive environmental impact
  than corn grain ethanol larger reduction in GHG
  emissions, better protects soil quality, reduced
  fertilizer inputs
• Some concern about impact on biodiversity

50
Challenges to successful development of the
cellulosic ethanol industry

• Harvest, handling, storage of huge amounts of
  biomass
• More cost-effective pretreatment and enzyme
  technologies
• Can they utilize multiple feedstock sources?
• Improved options for use of co-products
• Feedstock for industrial chemicals?
• Large-scale deployment is 7-10 years off
• Meantime, biofuel production capacity builds out
  until the breakeven price of maize, sugarcane,
  and oil palm is reached for biofuels (within 5-7
  years?)

51
Challenges for Global Food Security, Poverty
Reduction, and the CGIAR in a Biofuel World

• Accelerating crop yields to avoid excessive rise
  in food cost and the need for a large expansion
  of crop area into marginal soils and native
  ecosystems
• Achieving yields near the yield potential ceiling
  without negative impacts on environmental quality
  and GHG emissions through an ecological
  intensification approach
• Raising the yield potential of the major food
  crops and continuing to improve stress
  tolerancebut only slow, incremental increases
  likely despite the optimism of executives from
  major seed companies
• The magnitude of this scientific challenge is
  grossly underestimated. The CGIAR must play a
  proactive role in meeting it!

52
References

• Cassman K.G. and Liska A. J. 2007. Food and fuel
  for all Realistic or foolish? Biofuels Bioprod.
  Biorefin. 1 in press, pre-press access
  http//www3.interscience.wiley.com/cgi-bin/fulltex
  t/114283521/PDFSTART
• Cassman K.G. 2007. Climate change, biofuels,
  and global food security. Environ. Res. Lett. 2
  011002. http//stacks.iop.org/1748-9326/2/011002
• Cassman KG, Eidman V, Simpson, E. 2006.
  Convergence of energy and agriculture
  Implications for Research and Policy. CAST
  Commentary QTA 2006-3. CAST, Ames, Iowa.
  http//www.cast-science.org/cast/src/cast_top.htm
  
• Cassman, K.G. and Wood, S. 2005. Cultivated
  Systems. pp 741-789 In Millennium Ecosystem
  Assessment Global Ecosystem Assessment Report on
  Conditions and Trends. Island Press, Washington
  D.C. http//www.maweb.org//en/products.global.aspx
  
• Cassman, K.G., Dobermann, A., Walters, D.T.,
  Yang, H. 2003. Meeting cereal demand while
  protecting natural resources and improving
  environmental quality. Annu. Rev. Environ.
  Resour. 28 315-358
• Cassman, K.G. 1999. Ecological intensification
  of cereal production systems Yield potential,
  soil quality, and precision agriculture. Proc.
  National Acad. Sci. (USA) 96 5952-5959
• Duvick, D.N. and K.G. Cassman. 1999.
  Post-green-revolution trends in yield potential
  of temperate maize in the north-central United
  States. Crop Sci. 391622-1630
• Peng, S., K.G. Cassman, S.S. Virmani, J. Sheehy,
  and G.S. Khush. 1999. Yield potential trends of
  tropical rice since the release of IR8 and the
  challenge of increasing rice yield potential.
  Crop Sci. 391552-1559
• Tilman D, Cassman KG, Matson PA, Naylor R. and
  Polasky S. 2002. Agricultural sustainability
  and intensive production practices. Nature 418
  671-677