Project Summaries

09-556  Project Manager: J. M. Reeves


Darren Hudson, Texas Tech University

The national renewable fuel standard (RFS) established under the Energy Policy Act of 2005 requires a certain amount of ethanol in gasoline sold in the United States. Additionally, rising oil prices, global instability in the world petroleum market, and concerns over greenhouse gas emissions are all factors contributing to the rapid expansion of the ethanol industry in the United States. As the primary feedstock for ethanol production, demand for corn by the ethanol industry is having far-reaching consequences that extend beyond the corn market.

This study addressed two key, but very different elements of biofuel policy. First, in order to assess the future of biofuel demand and competition with cotton acreage and infrastructure, the potential demand for dried distillers grain (DDG) as a by-product of the biofuel production process was examined. Specifically, a survey was conducted of cattle consulting nutritionists (because they write the feed rations for feedlots) about their demand for DDGs under alternative price scenarios. The results of that analysis indicate that current demand for DDGs is sufficiently supplied by current production, thereby putting no additional price pressure on biofuels and increasing demand for corn. However, current trends in DDG exports suggest that in the future, demand for DDGs may outstrip supply, thereby creating additional demand for corn acreage.

The second analysis focused on the data used in carbon footprint analysis, which is a key element in the arguments for biofuels. Here, the carbon footprint estimate generated by state extension budgets (which are generally used by environmental groups and government agencies) with a distribution of observed carbon footprint estimates for actual farms in the Texas High Plains was evaluated. The results clearly indicate that the estimates based on state extension budgets significantly overestimate actual carbon emissions (in defense of the budgets, they are for planning, not actual on-farm activity, and thus include every possible field operation and chemical application). The implications are that agriculture is certainly not emitting near the carbon that the popular media would have us believe. But, that is also a double-edged sword. This result also means less carbon to reduce implying that potential revenue from carbon credits for biofuels and other activities is much less than implied in the media.


Project Year: 2012

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