Ethanol boom raises intriguing questions

By Robert Hagevoort: Ag Sense

The U.S. Environmental Protection Agency’s Renewable Fuel Standard requires U.S. fuel production to include a minimum amount of renewable fuels, starting at 4 billion gallons in 2006, and reaching 7.5 billion gallons in 2012. In addition, starting in 2013, the renewable fuels must include a minimum of 250 million gallons from cellulosic biomass.

Pumped up production
Production and demand for ethanol soared to new heights in 2006, according to data recently released. Production of ethanol reached 4.86 billion gallons, up 24.3 percent over 2005. Currently, 114 ethanol bio-refineries have the capacity to produce 5.6 billion gallons annually. There are 78 ethanol refineries under construction with a capacity of more than 6 billion gallons.

The recent expansion of the ethanol industry has dramatically increased domestic corn prices, from $2.30 from September 2006 to around $4.20 per bushel today.

Projections for 2007 indicate a definite upward trend in acreage.

Corn sources
Some will come from acres converted from soybeans to corn, some of it is being called for to come from the Natural Resources Conservation Service’s Conservation Reserve Program, which rents land from farmers for conservation purposes.

The question is, Will this be enough?

There will also be a shift in the typical historical usage patterns for corn, including livestock feeding. And how is the export market going to react to this new playing field? All expectations are for corn prices to remain at current levels, until alternatives are found.

Cellulosic materials
By all accounts, it still seems to be another five to seven years before the technology will be available to convert cellulosic materials, such as switchgrass, to produce ethanol.

What we may have to do is look at basic agricultural processes by which the sun’s energy is captured, and evaluate how we can do this more efficiently, with a minimum of other resources and convert this energy to feedstock for livestock, production of energy and, down the road, ethanol.

Dairy producers find themselves in the business of producing milk, meat and manure. This feedstock is valuable for two reasons: Because of its energy content for green energy and to offset carbon emissions from greenhouse gases, a credit that can be traded much like your stock portfolio.

How about crops that will grow with nearly no water, no energy and no effort, and that do produce a tremendous amount of biomass? Pigweed and tumbleweed, you say?

Bingo. Maybe these are new cliches.

Robert Hagevoort is a dairy specialist at New Mexico State University’s Agricultural Science Center at Clovis. He can be contacted at 985-2292 or dairydoc@nmsu.edu