Washington Insider: USDA and Ethanol

Source: By DTN/Progressive Farmer • Posted: Monday, January 23, 2017

Amid intense producer concerns about who the new USDA officials will be and numerous other issues, USDA released a new research report on ethanol recently. It is especially timely because of the widespread talk now about pressures to cap the renewable fuels standards in the next Congress as well as growing economic pressures from increasingly competitive natural gas.

Informa Economics is reporting this week that USDA now has determined that US corn-based ethanol “reduces greenhouse gas (GHG)emissions by 43% vs gasoline” and that additional benefits are expected through 2022.

In one of his last acts as Secretary, USDA Secretary Tom Vilsack commented that unlike other studies of GHG benefits, which relied on forecasts of future ethanol production systems and expected impacts on the farm sector, this study reviewed how the industry and farm sectors performed over the past decade to assess the current GHG profile of corn-based ethanol.

“This report provides evidence that corn ethanol can be a GHG-friendly alternative to fossil fuels, while boosting farm economies,” Vilsack said.

This report’s finding that lifecycle GHG benefits from corn ethanol are greater than estimated by a number of earlier studies is the result of a variety of improvements in ethanol production, from the corn field to the ethanol refinery. Farmers are producing corn more efficiently and using conservation practices that reduce GHG emissions, including reduced tillage, cover crops and improved nitrogen management. Corn yields also are improving—between 2005 and 2015, US corn yields increased by more than 10%.

Between 2005 and 2015, ethanol production in the U.S. also increased dramatically—from 3.9 to 14.8 billion gallons per year. At the same time, advances in ethanol production technologies, such as the use of combined heat and power, using landfill gas for energy, and co-producing biodiesel helped reduce GHG emissions at ethanol refinery plants.

By 2022, the GHG profile of corn-based ethanol is expected to be almost 50% lower than gasoline primarily due to improvements in corn yields, process fuel switching, and transportation efficiency, the study estimates.

The report also examines a range of factors that could enhance the GHG benefits of corn ethanol production. For example, it examined the benefits of improving the efficiency of ethanol refineries and adoption of additional conservation practices on corn-producing farms. In a scenario where these improvements and practices are universally adopted, the GHG benefits of corn ethanol are even more pronounced over gasoline, about a 76% reduction.

USDA says there are several reasons this report found greater lifecycle GHG benefits from corn ethanol than a number of earlier studies did. One of the most controversial aspects of earlier estimates was the assumption that using US corn to produce ethanol would result in “indirect land use changes” as land is shifted from grass and forests to commodity production as corn demand grows. Now, new information provides compelling evidence that indirect acreage impacts have been much lower than previously projected.

For example, the primary land use response from 2004 to 2012 has been to use available land resources more efficiently rather than to expand area. Instead of converting new land to production, farmers in Brazil, India and China have increased double cropping, expanded irrigation, reduced unharvested planted area, reduced fallow land and reduced temporary pasture.

Much of the international attention on supply of corn for ethanol has focused on Brazil, where earlier estimates anticipated conversion of rainforests to commodity production. But between 2004 and 2012, even as U.S. corn ethanol production increased more than 200%, deforestation in Brazil’s Amazon decreased from 10,200 to 2,400 square miles per year.

The report also demonstrates the added GHG benefits of on-farm conservation practices like reduced tillage, nitrogen stewardship, and cover crops, the practices outlined in USDA’s Building Blocks for Climate Smart Agriculture and Forestry strategy, which aims to reduce GHG emissions by over 120 million metric tons of carbon dioxide equivalent per year by 2025.

Certainly, this report will provide new ammunition for ethanol advocates, including opposition to conservationists who have used earlier studies to criticize ethanol’s environmental impacts. And, while the new study won’t end the competition of ethanol with animal feeds and food, it likely will provide new information for a better informed debate than in the past, Washington Insider believes.