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Expanding Biofuel Production and the Transition to Advanced Biofuels: Lessons for Sustainability from the Upper Midwest - Summary of a Workshop V Going Forward Much of the discussion at the workshop focused on the uncertainty and potential risks associated with expanding biofuel production and the need to look beyond a single technology solution to meet the nation’s long-term needs for energy. This chapter briefly reiterates common themes that were emphasized at the workshop by many participants including: uncertainties and risks, current policies, and suggestions by participants on how future policies might be structured to ensure more sustainable energy and agricultural systems. It also describes ongoing research and existing analytical tools to address some of the current uncertainties, and includes ideas, given by participants, for additional research and tools. As stated earlier, many participants noted that there is considerable uncertainty about future directions in the biofuel industry with regard to federal and state policies, feedstocks and technologies, financing, and energy markets. Corn-based ethanol currently accounts for 93 percent of domestic biofuels, and soybean-based biodiesel accounts for the remaining 7 percent. Because of EISA’s provisions, corn-based ethanol production is not likely to grow much beyond the cap of 15 billion gallons, or 6 million gallons above current production levels. Cellulosic or other advanced biofuels are projected to account for the bulk of the expansion of biofuel production during the next 5 to 10 years, and a variety of incentives is provided to encourage development of an advanced biofuel industry. In order to increase domestic production of advanced biofuels (through the advancement of the biofuel industry from non-food crops), the Biomass Crop Assistance Program (BCAP) was created under the 2008 Farm Bill to support the production and conversion of feedstocks for bioenergy. BCAP attempts to establish greater certainty for feedstock growers and biofuel producers. The program
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Expanding Biofuel Production and the Transition to Advanced Biofuels: Lessons for Sustainability from the Upper Midwest - Summary of a Workshop will establish annual payments to offset risks for biomass growers and will cover most of the costs of preparing the land and planting the crops.1 Biofuel producers can receive similar payments through BCAP to cover the costs of collection, harvest, storage, and transportation of biomass from fields to processing facilities. Discussions on U.S. energy policy were particularly fervent during the workshop, in part, because at the time the U.S. Congress was debating major climate legislation. Most participants expressed frustration with the current lack of an integrated U.S. energy and climate policy with clear goals and objectives. They described current policies as often inconsistent, not always based on the best science, and often perversely influencing markets. While the EISA provisions requiring some biofuels to meet GHG targets were applauded, many participants were disappointed by the act’s failure to create any incentives for corn-based ethanol producers to reduce emission levels or encourage performance improvements. Similarly, EISA’s failure to require that new production meet standards beyond those set for GHG emissions was seen, by a number of workshop participants, as problematic from a sustainability perspective. For example, EISA does not set targets for water efficiency. The prospect that new climate legislation would override EPA’s decisions to include indirect land-use change as part of the calculation of GHG emissions was seen as a direct assault on science, since research studies have made it clear that expansion of land used for biofuel production will result in some indirect effects. While agreeing that these effects are difficult to measure, these participants pointed out that they need to be recognized. Others suggested that more effective U.S. energy policies should be based on clear measures of performance, rather than incentivizing the production of particular energy feedstocks and technologies. Such policies would allow industry freedom and flexibility to innovate and tailor products to specific goals, such as fuel efficiency or reduced carbon emissions. There continues to be considerable uncertainty about future feedstocks and technologies. While a number of possible feedstocks have been touted as environmentally preferable to corn and as effective sources for making advanced biofuels, participants raised many questions: What are the best feedstocks for particular soil, water, and climatic conditions? How much more difficult will it be to transport cellulosic feedstocks to refineries? Will these new energy crops compete for land now used for food crops? 1 The Minnesota Project. 2009. Transportation Biofuels in the United States: An Update. St. Paul, MN. Available at http://www.mnproject.org/pdf/TMP_Transportation-Biofuels-Update_Aug09.pdf.
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Expanding Biofuel Production and the Transition to Advanced Biofuels: Lessons for Sustainability from the Upper Midwest - Summary of a Workshop Will the water and fertilizer requirements for cellulosic and other advanced biofuel feedstocks actually be significantly less than for corn? If these new crops are grown on “marginal” lands, will this affect the provision of valuable ecosystem services? Will farmers be willing to switch from traditional crops, such as corn, to new energy crops? Wood wastes are generally seen as an abundant and environmentally preferable feedstock for ethanol production. How will tradeoffs be made between their use for fuel or power, especially given the widespread state adoption of renewable power standards? Several presenters talked about possible future technologies for the production of fuels from biomass—including green gasoline and other “drop-in” fuels—that can use the same distribution and storage infrastructure as petroleum based fuels. Questions were raised about what the time frame would be for the commercialization of these fuels, whether the development of these fuels would compromise activities to commercialize cellulosic fuels, and whether and how such development would affect investments in the distribution and storage systems required for ethanol or other alcohol fuels. Participants often mentioned the inherent uncertainty in markets for biofuels, citing in particular recent decreases in demand, driven largely by relatively low prices for oil. In the longer term, the “blending wall” was seen as a constraint on demand, because the volumes of ethanol projected to be produced under EISA are far higher than can be consumed by the current fleet of flex-fueled vehicles or with gasoline mixtures of only 10 percent. Furthermore, effective demand is constrained by inadequate distribution systems with few outlets for E85, although recent allocations of federal stimulus money intend to change this to some extent. It was also noted that early investors in the ethanol industry obtained large returns over a very short period of time, while later investors were not as fortunate. In fact, many investments in new refineries failed, thus discouraging future investments both in the corn-based industry and for advanced biofuels. Another problem for investors is that while there are federal production mandates for advanced biofuels, these requirements can be waived—again creating market uncertainty. Many participants noted that the most important environmental and social impacts associated with current corn-based ethanol and advanced biofuels are also an area of some uncertainty. Small-scale field assessments and general ecological theory suggest that cellulosic and other advanced biofuels are likely to be better from an environmental perspective than corn-based fuels, but large-scale field experience is limited. While biofuels have been touted as a boon for rural communities, the impacts on local employment and communities appear mixed. Two workshop sessions described specific activities underway to address some of the uncertainties associated with expanded biofuel production and to develop indicators and other decision-support tools that could be used to assess
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Expanding Biofuel Production and the Transition to Advanced Biofuels: Lessons for Sustainability from the Upper Midwest - Summary of a Workshop at least some of the environmental impacts associated with current and future biofuel production and to evaluate tradeoffs. Representatives from USDA, DOE, and the U.S. Geological Survey (USGS) briefly described examples of specific R&D activities currently underway.2 They also explained the important role being played by the federal Biomass Research and Development Board to coordinate all federal agency activities and to guide future activities. The board currently has working groups focused on feedstock production, conversion science and technology, sustainability, logistics, environment, health and safety, distribution infrastructure, and blending. USDA supports a wide variety of research related to bioenergy, including activities focused on land availability, soil suitability, climate variability, crop growth and production capacity, natural resource quality, and production practices. Research on feedstocks includes studies of region-specific varieties and practices to optimize harvest yields and on-farm use of biorefinery co-products. The DOE representative explained that much of DOE’s budget is focused on technology deployment and building pilot commercial-scale biorefineries, often partnering with industry. DOE also does basic R&D technology development. Sustainability-related activities have increased substantially, but still constitute a relatively small portion of the R&D budget. The representative noted that DOE is focusing more on advanced fuels, such as green diesel and green gasoline, which are true replacement drop-in tools for petroleum-based fuels. The DOE Regional Biomass Feedstock Partnership program is focused primarily on feedstock production. The program is a partnership with the Sun Grant universities to conduct field trials exploring ways to maximize yields and minimize inputs, whether water or nutrients, as well as reduce soil erosion. USGS is developing sophisticated models to examine how climate change and the expansion of biofuel production in the U.S. Northern Plains will change future landscapes and the ability to provide critical ecosystem services. The study is designed to demonstrate tradeoffs and unintended consequences. Examples of various indicators, models, and other analytical tools focused on biofuels and their sustainability implications were discussed.3 Several different criteria and indicators efforts were reviewed, with participants questioning how they were going to be used and whether their use might result in more sustainable outcomes. It was also noted that indicators must be seen as voluntary tools to gauge performance, not as mandatory standards that might be considered non-market barriers to trade. Many participants suggested that better tools and monitoring data were needed to guide policy and investment decisions as well as to measure the actual 2 Detailed descriptions of specific projects sponsored by these agencies as well as a number of other federal agencies are included in Appendix C of this report. 3 See Appendix E for descriptions of some of the major indicator efforts and models available to assess biofuels.
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Expanding Biofuel Production and the Transition to Advanced Biofuels: Lessons for Sustainability from the Upper Midwest - Summary of a Workshop impacts of policy and technology choices.4 More comprehensive systems frameworks are needed to assess the interconnected environmental, economic, and social impacts associated with particular feedstocks, conversion technologies, feedstock land choices, location of refineries, and characteristics and conditions of local environmental resources. Tools should also assess the critical linkages between energy and climate change, they said. For example—how will the productivity of land used for biofuel feedstocks be affected by climate change? In addition, participants noted the need for better tools to understand the consequences of changes in land use and to value ecosystem services that may be affected by such changes. Some participants also stressed the importance of recognizing the high degree of uncertainty inherent in current biofuel modeling efforts. To create and implement the most effective biofuels policies, decision makers should be made aware of these uncertainties. Participants identified a number of high-priority areas for data monitoring, future research, and metrics, including the following: Better monitoring data, especially to assess the water quality and water quantity effects of increasing production of cellulosic and other advanced biofuel feedstocks. Research on the impacts of expanded production on individuals, communities, states, and regions; the extent to which local ownership increases the vulnerability of local communities; and how different ownership patterns encourage or discourage innovation and enhanced environmental stewardship. Research to determine whether and how extensively the biofuel industry supports rural economic development and the job creation. Systems analyses, linking energy and agricultural land-use change. Withdrawal of land from the CRP, which may affect biological diversity and ecosystem services. The health effects of biofuel production and use along the entire supply chain, including the effects of changes in water quality from increased use of agricultural chemicals (e.g., fertilizers and pesticides) to changes in air quality from tailpipe emissions. Tools to comprehensively assess sustainability impacts, including examining tradeoffs, evaluating alternative land uses, valuing ecosystem services (water, soils, biodiversity, etc.), and measuring industry performance. Analysis of the performance of different biofuel production technologies in fuels across all of the different parameters. 4 These participants noted that while more comprehensive assessments are needed, those measurements are quite costly and will require significant financial investment in research.
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Expanding Biofuel Production and the Transition to Advanced Biofuels: Lessons for Sustainability from the Upper Midwest - Summary of a Workshop COMMON THEMES GOING FORWARD During the last session of the workshop breakout discussion groups were asked to discuss common themes that they saw as particularly relevant throughout the two days of panel presentations and dialogue and report back to all participants. Following are themes and issues that many participants saw as relevant and in need of further attention as the U.S. biofuel industry continues to expand. Uncertainties As previously stated, a common theme among workshop participants was increasing concern about the uncertainties and potential risks associated with expanding biofuel production. Choices regarding the most sustainable feedstock technology, the type of fuel to produce, and a timeline for commercial-scale production pose critical uncertainties. Understanding Unintended Consequences, Value of Science The majority of participants noted that much of the underlying scientific information on biofuel production is subject to variations—often times based on dynamic factors such as climate change, ecosystem health and increased efficiencies in feedstock and conversion technologies. Furthermore, examining the direct consequences of expanding biofuel production is not enough. Even more fundamentally, policy makers and scientists should be made aware of the best methods of incorporating scientific data into analytical tools and indicators for sustainability to measure and mitigate potential unintended consequences. Performance-Based Metrics and Standards Many participants stressed the need for clearly stated policy goals and performance-based standards, and the value of developing standards which are flexible and adaptable over time. The standards will be crucial in monitoring and evaluating global ecosystem services in the future. Complex Systems and Linkages Throughout the biofuel supply chain, there are many linkages between systems. To ensure sustainable biofuel production in the future, the impacts among various systems will need to be assessed. Participants noted that unintended consequences will arise when energy, water, and climate change systems are linked. Better tools and indicators can mitigate many unintended consequences of expanding biofuel production, and can enable researchers to illustrate to policy makers the effectiveness of a systems approach. Full Range of Potential Impacts and Tradeoffs As U.S. biofuel production expands, there will be tradeoffs that will require policy makers to make tough decisions. Most participants agreed that better tools and indicators from the research community will be crucial in assessing tradeoffs more holistically—e.g., incorporating the impacts from land and water use, biofuel production, food production,
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Expanding Biofuel Production and the Transition to Advanced Biofuels: Lessons for Sustainability from the Upper Midwest - Summary of a Workshop and carbon sequestration in climate change adaptation and mitigation policies. Most Critical Research Needs Workshop participants focused a great deal of their discussions on future research needs as the U.S. biofuel industry expands. Such areas as human health and well-being, social and community impacts, and infrastructure needs and distribution networks were identified as requiring more in-depth research.
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