Biofuels, Agriculture and the Environment

Toward a Policy that Make Sense in a

Renewable Energy Future

Remarks by Craig Cox

Environmental Working Group

To the 2009 Kansas Natural Resources Conference

The role biofuels should play, if any, in a new economy built on renewable energy has become highly controversial.
The rapid growth in production in corn ethanol has raised serious questions about the impact of food-crop based
biofuels on food prices, volatility in grain prices, and new threats to soil, water, and wildlife. In addition, emerging
science is calling into question just how much corn ethanol actually reduces greenhouse gas emissions, if it reduces
those emissions at all. Economic analyses have questioned the contribution that corn ethanol can make energy
independence by replacing the 140 billion gallons of gasoline Americanʼs burn each year.

The same questions that science is raising about corn ethanol are also being asked of so-called next generation
biofuels that donʼt rely on food crops to produce biofuels.

Policy makers must sort through this sometimes conflicting information to chart a future course for biofuels based on
a clear-eyed assessment of the pluses and minuses of biofuels as a renewable energy source.

Such a clear-eyed assessment must be based on:

• A full appreciation of the challenges we face this century and how biofuels might help or hinder us in meeting
those challenges.
• An accurate assessment of whether our current biofuels policy is a bridge or barrier to the development of a truly
sustainable biofuels industry.
• A plan for putting in place the public policy that will ensure we harvest the promise and not the peril
of biofuels.

Letʼs take each of these items one at a time.

First letʼs look at the preeminent challenges we will face this century...
The first challenge we will face this century is to
move away from fossil fuels as fast as we can ...
 Scientists say we must cut greenhouse gas
emissions at least in half by 2050 to avoid the most
serious consequences of global warming...
And reduce the other devastating environmental
and ecological consequences of our addiction to
fossil fuels...
 Our next challenge is to build a new energy
economy founded on renewable source such as
solar...
...Or wind energy...
But also making energy conservation the first priority
of our energy policy...
BUT we must remember that we have to move
away from fossil fuels and build a new energy
economy WHILE lifting billions out of hunger...
... And Poverty
Moreover, we must meet these challenges in the face of
the global warming...

• More frequent
and more severe
fires.

• More frequent
and severe
drought.

• Pest and insect

eruptions.
With profound ecological effects that we donʼt fully
understand...

• Dead zones
expand 10-fold?

• 75 % of U.S.
coastal areas
already show
symptoms of
eutrophication.
... And that will exacerbate long-standing problems with
soil degradation and water pollution form agriculture...

• Increased
frequency and
severity of
storms.

• Soil erosion and

polluted runoff
from cropland
could double.
 ... while trying to grow biofuel feedstocks in a century in
which water becomes expensive and water shortages multiply.

• UNEP: More than half

of humanity will be living
with water shortages in
less than 50 years.

• GAO: 36 U.S. states

could face water
shortages by 2013.

• UN Secretary General
Ban Ki Moon: 2. 7 billion
people in 46 countries
with a high-risk of
violent conflict over
water by 2025.
Increased frequency
and severity of storms.
 The preeminent challenges
of this century then are to:

• move away from fossil fuels as fast

as we can,
• while doubling food production,
• lifting billions out of poverty, and
• living with the profound effects of
global warming.
So whatʼs a good biofuel given
the challenges we face?
• Can make a major contribution, quickly, to
displacing gasoline.

• Doesnʼt compete with food production for land

and water.

• Substantially reduces greenhouse gas

emissions.

• Conserves soil, water, and habitat.

• Agriculture with all its environmental,

economic and development implications is at
the center of this challenge.
So, given these challenges, what is the thrust of our current
biofuel policy?

... to expand the production and use of corn ethanol.

• 45 cent tax credit for each gallon of ethanol blended

with gasoline.

• 54 cent tariff on imported ethanol.

• Federal mandate to use corn ethanol (10 billion

gallons this year; 15 billion by 2015).

• Multiple state mandates and subsidies.

• Soon be spending more on ethanol tax credits each

year than on entire farm bill conservation title
 Our policy has “worked.”
Tax benefits and mandates to produce corn
ethanol have driven a rapid increase in production
U.S. Ethanol Production

7,000

6,000

5,000
Gallons (Millions)

4,000

3,000

2,000

1,000

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06
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19
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20
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But how does corn ethanol stack up against the criteria
for a “good” biofuel we talked about earlier?
 Corn ethanol simply canʼt replace
much of the 140 billion gallons of gasoline
we burn each year.

Using more corn to produce ethanol drives up the price of corn--the red band in the
figure. But higher corn prices drive down the profits of ethanol producers--the blue
band in the figure. Only so much corn can be used to produce ethanol...

Even using entire 2007 corn crop to produce ethanol would only replace 10 to 15
percent of the gasoline used in the U.S. each year.

Corn ethanol just canʼt get us where we need to go...

Corn ethanol competes with food production. Food
prices have dropped, but as soon as the global
economy recovers, we will be right back where we
were in 2008.

• “World agriculture has entered a

new, unsustainable and politically
risky period,” says Joachim von
Braun, the head of the
International Food Policy
Research Institute (IFPRI) in
Washington, DC.

• Poor people are suffering daily

from the impact of high food
prices, especially in urban areas
and in low income countries,” said
World Bank Group President
Robert B. Zoellick. “In some
countries, hard-won gains in
overcoming poverty may now be
reversed.”
Plus new science is raising big questions
about whether corn ethanol reduces
greenhouse gas emissions.
• Highly controversial, ongoing debate
among scientists.

• Highly dependent on how you deal

with “indirect effects” -- conversion of
grassland or forest to crop production.

• How to account of nitrous oxide

emissions from corn production.

• How you look at it also makes a big

difference--emission reductions on a
per mile basis tell a different story
than on a gallon of gasoline to gallon
of corn ethanol comparison.

• The chart shows that burning E10

only reduces greenhouse gas
emissions by about 2 percent per mile
driven.
... And intensified corn production is exacerbating long-
standing problems with soil degradation and water
pollution form agriculture.

• We have made almost

no progress in reduced
soil erosion since 1997
according to the
National Resource
Inventory.

• Agriculture remains the

single largest source of
water pollution in the
United States.
 Will cellulosic ethanol save the day???

• More questions than answers so far.

• Which biofuel wins: ethanol, butanol, bio-
gasoline???
• What conversion process comes out on top:
biological, thermochemical, pyrolysis???
• What feedstock is used and how is it produced
and harvested??????????
• Feedstock production is the biggest concern for
conservationists.
Is this the future?

• Using crop residues to

produce ethanol
increases the risk of
soil erosion and
polluted runoff.

• Crop “waste” is really

“soil food.” It is
essential to healthy
soils and a productive
and sustainable
agriculture.
Is this the future?

• Dedicated, multi-
species energy crops
could bring a big
improvement in
conservation.

• A vision of the future

that excites
conservationists.
Or is this the future????

• Biofuel feedstocks may end

up being produced the same
way as corn or soybeans.

• High yields per acre on land

near conversion plants will be
needed to make cellulosic
biofuels work.

• If the price is right, farmers

will push for the highest yield
they can get from each acre.
 So...
If corn ethanol is a dead-end and there are more
questions than answers about “next generation”
biofuels...
Where to now with public policy?
I think the best course is to:

• First, pause.
• Next, change direction.
• And finally, proceed with caution.
 First, pause

• Given everything we now know, we must quit using

federal and state mandates or subsidies to expand
“conventional” biofuel production (largely corn
ethanol).

• We should freeze at current levels the 2007 Energy

Independence Act requirement to produce corn
ethanol.

• We should phase out the “blenders tax credit”

while phasing in subsidies tied to greenhouse gas
reductions and conservation.
 Next, Change Direction
• We need to put in place a comprehensive energy policy.

• Conservation and energy efficiency must be the first priority

of that comprehensive policy.

• And we must balance our renewable energy portfolio:

• Corn ethanol currently gets 75 percent of renewable energy tax
benefits.

• Taxpayers’ money should be put into into those renewable energy

options with the greatest potential for energy independence, greenhouse
gas reductions, and for conserving soil, water, and habitat.
 Finally, Proceed with Caution
• In a recent article in Science Magazine, twenty-three
scientists from multiple disciplines had this to say
about “advanced biofuels”:

• “We know that grain-based biofuel cropping

systems as currently managed cause environmental
harm.”

• “The identification of unintended consequences

early in the development of alternative fuel
strategies will help to avoid costly mistakes and
regrets...”

• We need to make sure public policy pushes cellulosic

or advanced biofuels in the right direction.
 Promise or Peril of Biofuels

• If we pause, change direction and proceed with

caution, will can harvest the promise and avoid the
perils of biofuels.

• Right now we seem to be headed toward a more

rationale and comprehensive energy policy.

• That is very good news, but the corn ethanol industry

is pushing for more mandates and subsidies.

• Conservationists must be vigilant.

At the end of the day the most important priority
is not to trade soil or water for oil.

• It makes no sense to replace

one scarce resource – oil –
with two other scarce
resources – soil and water.

• Resource conservation
must be a central element of
biofuel policy—it is not now.

• Biofuels are a solution only if

they conserve soil, water,
and habitat.
 Thank You
For what you do to conserve soil, water, and
habitat.

We are counting on you.

Craig Cox
Environmental Working Group
Midwest Office, Ames Iowa
craig@ewg.org
 Thank You
For what you do to conserve soil, water, and
habitat.

We are counting on you.

Craig Cox
Environmental Working Group
Midwest Office, Ames Iowa
craig@ewg.org