production

A system of equations representing corn supply, feed demand, export demand, food, alcohol and industrial (FAI) demand, and corn price is estimated by three-stage least squares. A price dependent reduced form equation is then formed to investigate the effect of ethanol production on the national average corn price. The elasticity of corn price with respect to ethanol production is then obtained. Results suggest that ethanol production has a positive impact on the national corn price and that the demand from FAI has a greater impact on the corn price than other demand categories. Thus, significant growth in ethanol production is important in explaining corn price determination.

Energy security and environmental concerns about global climate change have lead to recent growth in the use of bio-fuels in the U.S. Brazil currently exports a substantial share of its sugarcane based ethanol to the U.S. to support the growing demand for bio-fuels. However, U.S. policies that exogenously affect the bio-fuel sector confound the understanding of the multi-market impacts of a growing bio-fuel demand. Moreover, the various forms of government intervention in the bio-fuel economy leave researchers with unclear conclusions about the prospects for bio-fuels. The indirect effects on related agricultural markets from increased bio-fuels consumption and the subsequent land use changes driven by expanded feedstock production also require more attention. To improve the understanding of these issues, we examine the market implications in the international ethanol sector by analyzing the equilibrium effects of bio-fuels policies. Additionally, we investigate land use change implications of an expanding Brazilian ethanol sector. In particular, the potential for livestock intensification of Brazilian pasture land grazing systems is considered as a prospective pathway for releasing new land for expanding sugarcane cultivation. We consider the related trade-offs in the Brazilian agricultural sector and their implications for trade with the U.S.

In this study we use data envelopment analysis to decompose the overall economic efficiency of a sample of ethanol plants into three subcomponents: technical efficiency, allocative efficiency and a new component we call marketing efficiency. The relative importance of these sources of efficiency is of particular interest given the recent history of bankruptcies, plant closings and ownership change in the industry. Results reveal that observed production units are very efficient from a technical point of view as suggested by a standard deviation of 1% in technical efficiency. However, our results also show that bigger plants tend to be more economically efficient than others. The conventional methodology would have identified this difference as coming from allocative sources, i.e. bigger plants were correct in anticipating better relative prices and built more capacity accordingly. However introduction of a new concept we call marketing efficiency reveals that bigger production units obtain better relative prices (through marketing contracts) than smaller production units rather than anticipating prices more accurately. This might be a potential reason underlying the recent wave of mergers and acquisitions in the industry.

When the lignocellulosic biofuels industry reaches maturity and many types of biomass sources become economically viable, management of multiple feedstock supplies – that vary in their yields, density (tons per unit area), harvest window, storage and seasonal costs, storage losses, transport distance to the production plant – will become increasingly important for the success of individual enterprises. The manager’s feedstock procurement problem is modeled as a multi-period sequence problem to account for dynamic management over time. The case is illustrated with a hypothetical 53 million annual US gallon cellulosic ethanol plant located in south west Kansas that requires approximately 700,000 metric dry tons of biomass. The problem is framed over 40 quarters (10 years), where the production manager minimizes cumulative costs by choosing the land acreage that has to be contracted with for corn stover collection, or dedicated energy production and the amount of biomass stored for off-season. The sensitivity of feedstock costs to changes in yield patterns, harvesting and transport costs, seasonal costs and the extent of area available for feedstock procurement are studied. The outputs of the model include expected feedstock cost and optimal mix of feedstocks used by the cellulosic ethanol plant every year. The problem is coded and solved using GAMS software. The analysis demonstrates how the feedstock choice affects the resulting raw material cost for cellulosic ethanol production, and how the optimal combination varies with two types of feedstocks (annual and perennial).

This report, generally referred to as the Billion-Ton Study or 2005 BTS, is an estimate of “potential” biomass available within the contiguous United States based on assumptions about inventory production capacity, availability, and technology.

The United States Department of Agriculture (USDA) and the United States Department of Energy (DOE) both place high importance on developing resources and conversion technologies for producing fuels, chemicals and power from biomass. The two departments are working together on several aspects of bioenergy. This report is the third to be produced from joint collaboration. This and other reports can be found at: http://www1.eere.energy.gov/library/default.aspx?page=1.

The website for biomass feedstock research sponsored by the DOE’s Office of Energy Efficiency and Renewable Energy Bioenergy Technologies Office (BETO) can be found at: http://web.ornl.gov/sci/transportation/research/bioenergy/. More general information about BETO's feedstock research program can be found at: http://www.energy.gov/eere/bioenergy/biomass-feedstocks.

The website for research and development sponsored by the USDA Forest Service can be found at: http://www.fs.fed.us/research/.
The website for bioenergy research sponsored by the USDA Agricultural Research Service can be found at: http:// www.ars.usda.gov/research/programs/programs.htm?NP_CODE=307.

The purpose of this study is to analyse the economical and environmental performance of switchgrass and miscanthus production and supply chains in the European Union (EU25), for the years 2004 and 2030. The environmental performance refers to the greenhouse gas (GHG) emissions, the primary fossil energy use and to the impact on fresh water reserves, soil erosion and biodiversity. Analyses are carried out for regions in five countries. The lowest costs of producing (including storing and transporting across 100 km) in the year 2004 are calculated for Poland, Hungary and Lithuania at 43–64 € per oven dry tonne (odt) or 2.4–3.6 € GJ−1 higher heating value. This cost level is roughly equivalent to the price of natural gas (3.1 € GJ−1) and lower than the price of crude oil (4.6 € GJ−1) in 2004, but higher than the price of coal (1.7 € GJ−1) in 2004. The costs of biomass in Italy and the United Kingdom are somewhat higher (65–105 € odt−1 or 3.6–5.8 € GJ−1). The doubling of the price of crude oil and natural gas that is projected for the period 2004–2030, combined with nearly stable biomass production costs, makes the production of perennial grasses competitive with natural gas and fossil oil. The results also show that the substitution of fossil fuels by biomass from perennial grasses is a robust strategy to reduce fossil energy use and curb GHG emissions, provided that perennial grasses are grown on agricultural land (cropland or pastures). However, in such case deep percolation and runoff of water are reduced, which can lead to overexploitation of fresh water reservoirs. This can be avoided by selecting suitable locations (away from direct accessible fresh water reservoirs) and by limiting the size of the plantations. The impacts on biodiversity are generally favourable compared to conventional crops, but the location of the plantation compared to other vegetation types and the size and harvesting regime of the plantation are important variables.

Governments worldwide are promoting the development of biofuels in order to mitigate the climate impact of using fuels. In this article, I discuss the impacts of biofuels on climate change, water use, and land use. I discuss the overall metric by which these impacts have been measured and then present and discuss estimates of the impacts. In spite of the complexities of the environmental and technological systems that affect climate change, land use, and water use, and the difficulties of constructing useful metrics, it is possible to make some qualitative overall assessments. It is likely that biofuels produced from crops using conventional agricultural practices will not mitigate the impacts of climate change and will exacerbate stresses on water supplies, water quality, and land use, compared with petroleum fuels. Policies should promote the development of sustainable biofuel programs that have very low inputs of fossil fuels and chemicals that rely on rainfall or abundant groundwater, and that use land with little or no economic or ecological value in alternative uses.

Interest in liquid biofuels production and use has increased worldwide as part of government policies to address the growing scarcity and riskiness of petroleum use, and, at least in theory, to help mitigate adverse global climate change. The existing biofuels markets are dominated by U.S. ethanol production based on cornstarch, Brazilian ethanol production based on sugarcane, and European biodiesel production based on rapeseed oil. Other promising efforts have included programs to shift toward the production and use of biofuels based on residues and waste materials from the agricultural and forestry sectors, and perennial grasses, such as switchgrass and miscanthus—so-called cellulosic ethanol. This article reviews these efforts and the recent literature in the context of ecological economics and sustainability science. Several common dimensions for sustainable biofuels are discussed: scale (resource assessment, land availability, and land use practices); efficiency (economic and energy); equity (geographic distribution of resources and the “food versus fuel” debate); socio-economic issues; and environmental effects and emissions. Recent proposals have been made for the development of sustainable biofuels criteria, culminating in standards released in Sweden in 2008 and a draft report from the international Roundtable on Sustainable Biofuels. These criteria hold promise for accelerating a shift away from unsustainable biofuels based on grain, such as corn, and toward possible sustainable feedstock and production practices that may be able to meet a variety of social, economic, and environmental sustainability criteria.

The aim of this study is to show the impact of different assumptions and methodological choices on the life-cycle greenhouse gas (GHG) performance of biofuels by providing the results for different key parameters on a consistent basis. These include co-products allocation or system expansion, N2O emissions from crop cultivation, conversion systems and co-product applications and direct land-use change emissions. The results show that the GHG performance of biofuels varies depending on the method applied and the system boundaries selected. Key factors include selected allocation procedures and the location of production and related yields, reference land and soil N2O emissions.

Since the mid-1990s there has been a growing worldwide interest in alternative transport fuels, of which ethanol is among the most promising options. This interest has in recent years gathered pace, stimulated by high oil prices and the generally perceived view that this trend is likely to accentuate in the future. The need to reduce GHG emissions is also a fundamental reason for this interest. The focus of this paper is on fuel ethanol production from sugar and starches with emphasis on short-term issues and implications for the global market. Replacing 10-20 % of petrol with ethanol is a feasible and desired option.

The international market in fuel ethanol is in its initial stage and its full development will require the diversification of production, in terms of both feedstocks and number of producing countries. Sustainable production should become a requirement for which certification seems to be a necessity, but should be defined to assure sustainability in a broad sense so that it does not impose additional barriers to trade; policies should be defined to induce market competitiveness and sustainable development.