July 31, 2006
Corn Price Rise Coming Due To Use For Ethanol

The growing use of corn to produce ethanol is expected to drive up the price of corn by about 25% within a single year.

Fresh signs of ethanol's new economic impact are expected soon. After languishing for years, corn prices are projected to rise about 25 percent from around $2.00 a bushel currently to $2.45 a bushel this next crop year, reports the US Department of Agriculture (USDA). But as ethanol demand for corn kicks in, prices could go much higher in the future depending on gasoline prices. Meat and grocery prices could eventually rise as well, some analysts say.

"Ethanol has had huge impact on corn markets," says Jason Hill, a University of Minnesota researcher and coauthor of a study on ethanol's environmental impact published in the proceedings of the National Academy of Science last month. "Competition between food and fuel is growing, along with the environmental consequences as more ethanol facilities are built," the study says.

The drive to produce food-based biofuels is misplaced, because even if all US corn and soybeans were used, they "would meet only 11 percent of gasoline demand and 8.7 percent of diesel demand. There is a great need for renewable energy supplies that do not cause significant environmental harm and do not compete with food supply," the study says.

The rising use of biomass for energy production is going to put food buyers in direct competition with car drivers for the same agricultural output.

The price of meat will rise as a result.

One key impact is that the price of feed corn for cattle, pork, and poultry could rise 60 to 70 percent over the next two years, although meat and other grocery items may not see significant price gains for up to four years, Wisner says.

So will the price of popcorn, corn tortillas, and corn muffins for that matter.

The rise in demand for corn to produce ethanol might be short lived. The development of cellulosic technology will eventually enable bushes, trees, and most notably perennial switchgrass to be used to produce ethanol.

Clearly, there's a great deal of potential energy to be tapped. A study at Argonne National Laboratory estimates that a gallon of ethanol produced from kernels of corn in today's processes provides about 20,000 BTUs more energy than the energy that went into making it. The study projects that using cellulose from switchgrass would triple that net gain, to about 60,000 BTUs per gallon, mostly because little fossil fuel would be used in farming the grass. But costs need to come down to make this practical.

It was this "cellulosic" ethanol that President Bush spoke about when he proposed adding $150 million to next year's federal budget for research into using switchgrass. Raab says switchgrass is appealing; for one thing, an acre of land can produce four times the mass of switchgrass as of corn. And switchgrass is far hardier and easier to grow than corn. "The energy balance for ethanol from switchgrass is tremendously better," he says. "It doesn't require all the fertilizer, all the irrigation, all the energy intensity that corn does."

Switchgrass has many environmental advantages over corn as an energy source.

Perennial grasses, such as switchgrass, and other forage crops are promising feedstocks for ethanol production. "Environmentally switchgrass has some large benefits and the potential for productivity increases," says John Sheehan of the National Renewable Energy Laboratory (NREL). The perennial grass has a deep root system, anchoring soils to prevent erosion and helping to build soil fertility. "As a native species, switchgrass is better adapted to our climate and soils," adds Nathanael Criers, NRDC Senior Policy Analyst. "It uses water efficiently, does not need a lot of fertilizers or pesticides and absorbs both more efficiently."

Switchgrass already produces much more energy per acre. Our problem is we need cheaper and more efficient ways to break down the cellulose sugar polymers that contain the sugar which can be converted into ethanol. Once the cellulosic technologies mature then breeding programs could more than double switchgrass yield per acre and further widen its advantages over corn.

"The key to producing enough ethanol is switchgrass," says Greene. Switchgrass shows great potential for improving yields, offers environmental benefits and can be grown in diverse areas across the country. Current average yields are five dry tons per acre. Crop experts have concluded standard breeding techniques, applied progressively and consistently, could more than double the yield of switchgrass. Yield improvements predicted by the report of 12.4 dry tons per acre are in keeping with results from breeding programs with crops such as corn and other grasses. The innovations discussed have a net effect of reducing the total land required to grow switchgrass to an estimated 114 million acres. Sufficient switchgrass could be grown on this acreage to produce 165 billion gallons of ethanol by 2050, which is equivalent to 108 billion gallons of gasoline. The next logical question is how do we integrate switchgrass production into our agricultural systems. The answer lies with the ability to produce animal protein from switchgrass. "If we have cost-effective agricultural policy, farmers will rethink what they plant," says Lynch "For example, we are using 70 million acres to grow soybeans for animal feed. You can grow more animal feed protein per acre with switchgrass. If there were a demand for biomass feedstocks to produce ethanol and other biofuels, farmers would be able to increase their profits by growing one crop producing two high value products."

To put that equivalent of 108 billion gallons of gasoline in perspective: The United States consumes over 320 million gallons of gasoline per day or about 117 billion gallons per year. So in theory 114 million acres of land (about a third of an acre per person) could produce enough switchgrass to power all cars in the United States. To put the land needed into perspective, US farmers plant about 74 million acres of soybeans, 81 million acres of corn, 14 million acres of cotton, and 59 million acres of wheat. So planting 114 million acres for switchgrass is not impossible by any means.

The United States is 2.3 billion acres total with 442 million or 19.5% used by crops. If 114 million acres were devoted to switchgrass for ethanol that would increase crop land usage by about a quarter.

If switchgrass becomes a really cheap way to produce biomass energy then that doesn't prevent a rise in the price for corn. Some of the tens of millions of acres that will get put into production for switchgrass will be land that otherwise would have been planted in corn, wheat, soy, and other crops used to feed humans and livestock.

My standard rant on biomass: The development of cheap photovoltaics would allow land that is not used for food crops to produce energy. Much of the surfaces that will be covered by cheap photovoltaics will be already existing buildings and other structures built by humans. Biomass energy competes with wild plants and animals for use of the same land. Photovoltacs (and nuclear power for that matter) leaves more of nature in the natural state.

Some Americans look at the US, see huge amounts of wide open spaces, and conclude that expanded planting of crops will have little impact. But the development of cheap cellulosic technologies will also create demand for expanded planting in parts of the world far more densely populated and already suffering from shrinking natural areas. Think of India for example and imagine large chunks of its land shifted into biomass energy production.

My guess is that the cellulosic technology problems will get solved and we will witness a huge shift toward use of switchgrass to produce ethanol.

Share |      Randall Parker, 2006 July 31 10:47 PM  Energy Biomass


Comments
back40 said at August 1, 2006 12:01 AM:

These guys have been smoking their socks again. Switchgrass is only productive when it is not harvested. If you cut it and haul it away then you'll have to replace the nutrients removed, you'll have to fertilize. The net gain, which is exaggerated by boosters already, will decrease monotonically over time unless you pour the nutrients back in. There's no free lunch and no tooth fairies.

If you insist on burning dirt then maize grass is as good as switchgrass. These folks are comparing apples and oranges since they compare only the grain of maize to the whole switchgrass plant. When you compare the whole maize plant switchgrass doesn't look so good. And if you are considering breeding for plants that have certain yield characteristics maize has already been improved and we have a huge amount of experience producing a wide variety of cultivars. If you look at varieties developed for use in silage - which uses the whole plant - you'll find they are very tall and very productive of dry matter, much more so than varieties developed for grain production. Animal protein is already produced from maize silage, it is a standard ruminant forage.

I don't think that these folks have any idea what they are talking about, and that this whole thing is a hustle that we will regret.

Wolf-Dog said at August 1, 2006 12:12 AM:

It turns out that simply burning various plants in the furnaces in order to spin turbines for power generation, and then to use this electricity to charge batteries for electric vehicles, is a FAR more efficient way of converting energy.

By directly burning genetically engineered fast growing grass or wood, etc, in furnaces, the generated electricity can charge the lithium batteries that will be very efficient and cheap within 2-3 years. Already the lithium batteries are acceptable for cars, but we just need a few more years to make them cheaper and more durable, and their charge capacity will almost certainly be doubled by 2008.

Burning vegetables in power stations, is actually carbon neutral, as opposed to burning coal, which also
contains sulfur and heavy metals...

Bob Badour said at August 1, 2006 9:08 AM:

Wolf-Dog,

What if we fermented the cellulose for ethanol and burned the remaining must (I am not sure what it is called when making ehtanol for fuel, but the remnants from wine-making are called the must) to charge batteries? Would dead yeast and whatever is left of the plant matter have enough combustible material remaining?

Jake said at August 1, 2006 10:07 AM:

I was talking with an ethanol expert at 3M. 3M makes a membrane that only allows alcohol to pass through so it removes the need to distill the plant brew.

He stated that the very best plants to use for ethanol are sugar beets and sugar cane. It makes sense as only plant sugar can be converted to alcohol. It also makes sense from an economic standpoint.

There is a huge world surplus of sugar and farmers in the US are heavily subsidized. By finding a productive use for those sugar crops, tax dollars would be saved and fewer farmers would have to quit the business every year.

K said at August 1, 2006 12:05 PM:

Keep in mind - biomass of any ilk needs water to grow - and some plants need a lot. Even in the US we are exhausting our water resources in many areas. More acreage is available if marginal soil can be improved.

Biomass can be better than nothing. But Randall stays on the right track; solar works all seasons, on any land, needs nothing once in place, and is more efficient than biomass. Yep, some days are too cloudy and some places are too far North.

Do crops ever fail? Heard of blight, drought, mineral depletion, fertilizer pollution downstream?

Nick said at August 1, 2006 12:24 PM:

"Switchgrass is only productive when it is not harvested. If you cut it and haul it away then you'll have to replace the nutrients removed, you'll have to fertilize. The net gain...will decrease monotonically over time unless you pour the nutrients back in."

What would happen to the remnants of the switchgrass (the "must") after ethanol production? Could the soil depletion problem be solved by putting those remnants back in the soil? Perhaps by feeding the remnants to farm animals and spreading their manure on the fields? Or burning the remants and spreading the ash on the fields?

back40 said at August 1, 2006 4:34 PM:

It would help Nick. The "must" is called co-products in biofuel lingo, and their use as animal feed is a significant part of the economic justification with current ethanol systems. Using them as fertilizer, or using dung after animals have had a shot at it would reduce the need for imported fertility though not eliminate it. It has little nitrogen but has some potassium, phosphorous and secondary minerals.

Engineer-Poet said at August 1, 2006 5:27 PM:

Error in the parent post:  the USA uses about 9.125 million barrels of gasoline (383 million gallons) per day.  That's just shy of 140 billion gallons a year.

If you put the byproducts of switchgrass fermentation or combustion back on the land, you'll see the same results as when buffalo and prairie fires put the same byproducts back on the land.  That's the process which created the deep, rich soil which covered the plains before plows touched them.  Human intervention can probably do it one better, by turning some of the grass into charcoal (activated carbon) and mixing it in.  Activated carbon is inorganic, lasts hundreds or thousands of years (making it a great carbon sink) and holds onto nutrient ions rather than letting water wash them away.  That's the secret of terra preta de los indios.

The real problem is that all of these schemes are thinking too small and not considering the whole picture.  Drought and heat stress will destroy the productivity of all the prospective switchgrass acreage if warming isn't brought under control, and a scheme which only replaces gasoline leaves the petro-diesel, jet fuel, heating oil, and coal and natural gas pumping carbon into the air.

This thing has grown too big for small solutions, so look for a bigger axe to whack it down.

Wolf-Dog said at August 1, 2006 7:59 PM:

By using genetically engineered fast growing plants that need less water, we can create a lot of fuel for furnaces that generate electricity by spinning turbines. This scheme WILL stop the greenhouse effect because burning plants is carbon neutral (since the new plants that grow will absrob that much CO_2). This scheme would greatly reduce the CO_2 emissions, since the natural gas will not be necessary when electricity is abundant, and jet fuel can also be derived from plants, although it might cost a little more.

And yes, after corn and other plants are fermented for methanol, the remaining organic material would still be very rich in carbon, and it can easily be burned as fuel (a small percentage of the corn gets converted to alcohol by fermentation). Thus burning the remainder of corn after fermentation to generate electricity by spinning turbines, would make the ethanol production indirectly very economical, although ethanol production will no longer be necessary once the lithium batteries are improved by 2008.

Thus the KEY to solving both the problem of oil shortage and greenhouse effect, is to improve the batteries for electric vehicles.

Simon said at August 18, 2006 4:49 AM:

I think the important points are that switchgrass needs water to grow. Is there enough water in the US to increase the area you have under cultivation by 114million acres (that's equivalent to a state somewhere in size between New Mexico and Arizona)? If you are to use anything plant-based to produce energy you have to drive off that water before you can do much with it. I've no idea what the water content of switch grass is, but its going to be at least 50% of the living plant's mass.

How do you propose to get rid of this water? Harvesting the plant and dragging it across country to dry it/process it means you're wasting energy dragging water about. Leaving it to dry in the fields is hit and miss (it might rain and wet the crop again) and could possibly reduce the amount of light available for the remains of the grass below to enable it to grow.

Secondly, celulose is energetically expensive to break down. If it was easy plant's wouldn't use it to grow and finally you've got to get the product to the customer (energy input).

Not that oil is probably any better. How about smaller cars, public transport and insulating houses better?

Tom Harrington said at November 5, 2007 11:52 AM:

Meanwhile, miscanthus produces more Btu per acre than any crop including sugar. In addition, it has a negative carbon effect. That is, in growing and being combusted, it puts more carbon in the ground than it emits for the entire cycle. Water use is minimal. Water content at harvest is 11 -14%, far lower than work and excellent for combustion, or other conversion techniques.

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