Progress 01/01/05 to 09/30/09
Outputs
OUTPUTS: Through the development of this project major analytical capabilities were added: 1. Assessment of land use decisions for the agricultural level at the county level. This implies integrating cropland, cropland in pasture, pastureland/rangeland, and cropland in the Conservation reserve Program into single analytical framework. 2. Evaluating the competitiveness of bioenergy dedicated crops in the different land use categories described above. Among the bioenergy crops included are switchgrass, poplars, willows, forest sorghum; and other feedstock are crops residues (corn, wheat, sorghum), forest and wood residues. 3. Integrating land use changes and changes in agricultural practices with changes in the embodied energy, soil carbon, and net carbon flux in the agricultural sector. 4. The capability to assess the environmental performance of the agricultural sector: erosion, nitrogen, chemical, and herbicides. 5. The ability to evaluate the economy wide impacts of changes in land use, agricultural practices, and overall productivity in the agricultural sector. These advances have resulted in a series of analysis that have disseminated to the scientific community through direct collaboration, scientific papers and presentations. At the same time policy makers and stakeholders (producers' organizations, environmental groups, energy organizations, and consumers) have benefited from a large number of activities in which results have been share and discussed. The dissemination activities included among many outputs, a Congressional Testimony, briefings to congressional staffers from both House and Senate, direct briefings to federal agencies (United States Department of Agriculture, Department of Energy, Department of Defense, NASA, Oak Ridge National Laboratory, Sandia National Laboratory). Among the academic community, dissemination activities were carried out with the following Universities (Illinois, Purdue, Iowa State, Oklahoma State, North Dakota State, California at Berkeley, North Carolina State, Florida, Mississippi State, Yale, Dartmouth, Princeton, Indiana, Minnesota) PARTICIPANTS: University of Tennessee Daniel De La Torre Ugarte Burton C. English Chad Hellwinckel Kim Jensen Lixia He Lambert James Larson Jamey Menard Roland Roberts Donald Tyler Marie Walsh Brad Wilson Kansas State University Richard Nelson Oak Ridge National Laboratory Craig Brandt Robert Perlack Tristram West Oklahoma State University Michael Dicks Jody Campeche TARGET AUDIENCES: Direct engagement with diverse group of stakeholders to brief them in the linkages between energy policy, climate change policy, and the impacts in the performance of the agricultural sector. These groups included American Farm Bureau, National Corn Growers, National Farmers Union, National Beef Cattlemen Association, American Trustland, National Wildlife Federation, USDA Chief Economist, House and Senate staffers from agricultural, energy, and commerce committees and subcommittees. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
- Improve information on the economic potential and impacts of cellulosic biofuels: This project has been critical in providing information to the USDA/DOE One Billion Ton Study that assesses the potential supply of feedstock production in the United States. Also this project has provided the Energy Information Administration with the necessary data for the Energy Outlook in the area of renewable transportation fuels. - Estimation of environmental impacts of extended biofuels production: This project evaluated the impacts of increased ethanol production from corn starch on agricultural land use and the environment in the US. Results indicate that increased corn ethanol production had a positive effect on net farm income. Results also indicate that if CRP land was converted to crop production in response to higher demand for ethanol in the simulation. Substantial shifts in land use occurred with corn area expanding throughout the US. When conservation tillage adoption was assumed to remain at 2007 levels for the 10 year period, regional tillage intensity went up, soil erosion rose, fossil fuel-based carbon emissions increased, and soil carbon stocks decreased as a result of increased corn production. Additional adoption of conservation tillage above 2007 levels mitigated the adverse effects of increased corn production on soil erosion and net carbon emissions to the atmosphere. - Estimation of the economic impacts of energy and climate change policies on US agriculture: This project analyzed how meeting several proposed energy/climate change instruments might impact the U.S. agricultural sector. Along with the RFS, policy scenarios that have been analyzed include a cap‐and‐trade regulatory system and varying treatments of agricultural offsets. The results indicate that under a properly constructed cap and trade program: net returns to agriculture are projected to be positive and exceed baseline projections for eight of nine crops analyzed; income from offsets and from market revenues is higher than any potential increase in input cost including energy and fertilizer; at projected carbon prices of up to $27 per MtCO2e, afforestation of cropland will not occur; major shifts in commodity cropland use do not occur; crop and beef prices are not disrupted; and biomass feedstock production creates significant direct and indirect reduction in greenhouse gases (GHG). This includes a direct reduction of an accumulated 460 million metric tons CO2 equivalent. - Estimation of the economic wide impacts of Renewable Energy Standards How meeting proposed Federal Renewable Electricity Standards (RES) might impact economy and the agricultural production sector. Renewable energy technologies were assessed to determine their ability to contribute to meeting the additional renewable energy requirements given the resource base of four states Colorado, Florida, Kansas, and North Carolina. The expenditures on construction of additional renewable energy facilities and recurring operating expenditures on inputs to renewable energy generation were then used to project the economic impacts of meeting the additional renewable energy requirements.
Publications
- De La Torre Ugarte, D.G. 2009. The Role and Implications of Biofuels Blending Targets. The Biofuels Market: Current Situation and Alternatives Scenarios. United Nations Conference on Trade and Development, UNCTAD/DITC/BCC/2009/1, United Nations, Geneva and New York.
- De La Torre Ugarte, D.G. 2009. Trade Opportunities for Developing Countries. The Biofuels Market: Current Situation and Alternatives Scenarios. United Nations Conference on Trade and Development, UNCTAD/DITC/BCC/2009/1, United Nations, Geneva and New York.
- De La Torre Ugarte, D.G., English, B.C., Hellwinckel, C.M., West, T.O., Jensen, K.L., and Clark, C.D. 2009. Analysis of the Implications of Climate Change and Energy Legislation to the Agricultural Sector. BEAG (Bio-Based Energy Analysis Group) and APAC (Agricultural Policy Analysis Center) Report to the Energy Foundation.
- English, B.C., Jensen, K.L., Menard, R.J., and De La Torre Ugarte,D.G., 2009. Projected Impacts of Proposed Federal Renewable Portfolio Standards on the Kansas Economy. BEAG (Bio-Based Energy Analysis Group) Report to the BiPartisan Policy Center.
- English, B.C., Jensen, K.L., Menard, R.J., and De La Torre Ugarte, D.G. 2009. Projected Impacts of Proposed Federal Renewable Portfolio Standards on the North Carolina Economy. BEAG (Bio-Based Energy Analysis Group) Report to the BiPartisan Policy Center.
- English, B.C., Jensen, K.L., Menard, R.J., and De La Torre Ugarte, D.G. 2009. Projected Impacts of Proposed Federal Renewable Portfolio Standards on the Florida Economy. BEAG (Bio-Based Energy Analysis Group) Report to the BiPartisan Policy Center.
- English, B.C., Jensen, K.L., Menard, R.J. ,and De La Torre Ugarte, D.G. 2009. Projected Impacts of Proposed Federal Renewable Portfolio Standards on the Colorado Economy. BEAG (Bio-based Energy Analysis Group) Report to the BiPartisan Policy Center.
- Hellwinckel, C.M., and De La Torre Ugarte, D.G. 2009. Peak Oil the the Necessity of Transitioning to Regenerative Agriculture. Winning Entry of the Farm Foundation's 30-Year Challenge Policy Competition.
- West, T., Brandt, C., Baskaran, L., Hellwinckel, C., Mueller, R., Bernacchi, C., Bandaru, V., Yang, B., Wilson, B., Marland, G., Nelson, R., Post, W., and De La Torre Ugarte, D. 2009. Cropland Carbon Fluxes In The United States: Increasing Geospatial Resolution Of Inventory-Based Carbon Accounting. Ecological Applications. (In Press)
- Dicks, M., Campiche, J., De La Torre Ugarte, D., Hellwinckel, C., Bryant, H., and Richardson, J. 2009. Land Use Implications of Expanding Biofuel Demand, Journal of Agricultural and Applied Economics, August 2009, 41(2):435-453.
- Nelson, R.G., Hellwinckel, C., West, T., De La Torre Ugarte, D., and Marland, G. 2009. Energy use and carbon dioxide emissions from cropland production in the United States, 1990-2004, Journal of Environmental Quality.
- De La Torre Ugarte, D. 2009. Biodiesel: The Potential Role of Jatropha. The Biofuels Market: Current Situation and Alternatives Scenarios. United Nations Conference on Trade and Development, UNCTAD/DITC/BCC/2009/1, United Nations, Geneva and New York.
- Larson, J.A., English, B C. , De La Torre Ugarte, D.G., Menard, R.J., Hellwinckel, C.M., and West, T.O. 2009. Economic and Environmental Impacts of the Corn Grain Ethanol Industry on the United States Agricultural Sector, Journal of Soil and Water Conservation. (In Press)
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Progress 01/01/08 to 12/31/08
Outputs
OUTPUTS: There is concern about the potential negative impacts of rising corn ethanol production on crop prices, livestock production, human food supplies, and the environment. These concerns were addressed in a study evaluating the impacts that corn ethanol production might have on the environment as well as the economic impacts to the US agricultural sector. This analysis shows that U.S. agriculture is capable to meet the energy goals outlined in this report solely through the increased use of corn-based ethanol with potentially significant environmental cost. Three scenarios, a continuation of current ethanol production, higher production expected in the USDA 10-year baseline and an 18-billion gallon per year production highlight the results. Environmental impacts begin to appear by meeting the expected production levels in current USDA 10-year baseline projections and increase with higher ethanol production goals. Relaxing some of the assumptions built into the model used in the analysis tend to reduce these environmental impacts. Three major factors that would reduce this potential impact are (1) the extent to which additional land is made available to meet the increased demand for corn; (2) the extent to which producers, particularly in the Corn Belt region, can manage the expected intensity of corn production; and (3) the extent to which cellulosic ethanol production becomes commercially viable within the next 10 years. The model results suggest that many natural resource issues, such as soil quality, soil erosion, and possibly water quality from increased nitrogen fertilizer use and wildlife habitat from increased conversion of land to more intensive corn production - will be exceedingly "at risk", especially in the Corn Belt region. For example, model results suggest that non-fertilizer, nitrogen and fertilizer expenditures increase about $272 million, $250 million, and $300 million, respectively, for every additional billion gallons of ethanol produced over the current production levels with a major portion of this increased input use in the Corn Belt region. This development raises concerns of potentially increased nutrient movement into waterways, exacerbating hypoxia in the Gulf. Also documented in the report are expected higher rates of erosion (in million of tons and acres) and suspended and deposited sediment levels. PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: Nothing significant to report during this reporting period. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
As the results were presented to NRCS officials, USDA agencies involved in conservation efforts, such as the Natural Resources Conservation Service (NRCS) and the Farm Service Agency (FSA) are more aware that increased corn-based ethanol production could carry the following implications: 1. More intensive corn production in the Midwest, particularly the western Corn Belt and eastern Nebraska although total corn acreage throughout the US increases. 2. Soybeans leaving traditional corn-soybean rotations with substantial soybean acreage shifting out of the Corn Belt into the Southeast. 3. Higher input use of both non-fertilizer chemicals and fertilizers. 4. Higher soil erosion and sedimentation rates. 5. Lower soil carbon sequestration rates and higher carbon emissions from crop production. 6. Shifts in cotton acreage westward and wheat into the Southeast.
Publications
- English, B.C., De La Torre Ugarte, D.G., Larson, J.A., Menard, R.J., Hellwinckel, C.M., Chuang, L., and Spinelli, P. 2008. Evaluating the economic and environmental impacts on the agricultural sector as a result of the push toward renewable fuels. A report to the National Resource Conservation Service in fulfillment of a contract between Southern Appalachian Cooperative Ecosystems Studies Unit, NRCS and The University of Tennessee 68-3A75-4-153. March, 2008.
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Progress 01/01/07 to 12/31/07
Outputs
Bioenergy allows for a potential win-win-win scenario for energy security, agriculture, and rural economic development. Producing 60 billion gallons of ethanol from renewable resources by the year 2030 is projected to result in the development of a new industrial complex with nearly 35 million acres planted to dedicated energy crops. This industrial complex is estimated to have an economic impact in excess of $350 million within the U.S., creating 2.4 million additional jobs; many in Rural America. Not only can U.S. agriculture meet the nation's food and feed demand, but it has sufficient resources to produce significant quantities of biofuels. Using POLYSYS, an agricultural simulation model developed at the University of Tennessee, and IMPLAN, an input output model, this report assesses the potential impacts of increasing production of ethanol and bio-diesel beyond current market levels and the levels specified in the recently enacted renewable fuel standard. Specifically, the objective of the study is to analyze the impacts on agriculture and the economy from increased ethanol (starch and cellulosic) production. The levels of production analyzed are 10, 30, and 60 billion gallons of ethanol by 2010, 2020 and 2030, respectively. In addition, sensitivity to the timing of cellulosic to ethanol commercial introduction and impacts cellulosic introduction has on the corn to ethanol industry are projected. The study also includes an assessment of the impacts of producing 1 billion gallons of bio-diesel production by 2012. For the agricultural sector, this new demand for agricultural cropland and crops implies an additional $11 billion of net farm income by 2030, and savings of more than $5 billion dollars in government payments in that year. Overall for the period 2007 to 2030, the estimated accumulated gains in net farm income are over $210 billion. Between 2007 and 2012, corn grain is the primary feedstock for ethanol production at a little more than 12 billion gallons per year resulting in an increase in corn price of about $0.90/bushel in 2010. Cellulosic ethanol is assumed to be commercially viable in 2012 and initially wood from forest residues and mill wastes are used. By 2014, dedicated energy crops are utilized and become the primary cellulosic feedstock by 2017. Crop residues in the form of wheat straw and corn stover become significant feedstocks after 2020. In order to meet the specified goals, if cellulosic ethanol is not commercially viable until 2015, 20 billion gallons of ethanol will need to come from corn. This results in the price of corn increasing to $4.65/bushel. This high corn price is likely prohibitive to attainment of the ethanol goal. By 2030, agricultural exports are reduced by $3 billion, with most of the reduction occurring in the soybean market. However, in that same year, ethanol is projected to displace more than 20 percent of domestic gasoline consumption, potentially reducing oil imports by $52 billion dollars. For the entire period through 2030, the displacement would be 10.48 billion barrels of oil, and a potential import reduction of $629 billion dollars.
Impacts
A goal of 60 billion gallons of ethanol per year: 1) Can be achieved without using CRP lands. 2)Will be fostered by research increasing agricultural productivity and commercialization of cellulosics to ethanol. 3) Is projected to result in a cumulative increase in net farm income over the 2007-2030 of $210 billion. 4) Is estimated to impact the nation's economy by $350 billion and 2.4 million jobs, with much of these impacts occurring in the nation's rural economies. 5) Will provide for displacement of more than 20% of the gasoline by 2030; potentially reducing oil imports by $52 billion. 6) Can result in cumulative displacement of 10.48 billion barrels of oil, and a potential import reduction of $629 billion through 2030.
Publications
- De La Torre Ugarte, D.G., B.C. English, and K. Jensen. (2007). Sixty Billion Gallons by 2030: Economic and Agricultural Impacts of Ethanol and Biodiesel Expansion. American Journal of Agricultural Economics. 89(5): 1290-1295, December.
- Walsh, M.E., D.G. De La Torre Ugarte, B.C. English, K. Jensen, C. Hellwinckel, R.J. Menard, and R.G. Nelson, (2007). Agricultural Impacts of Biofuels Production. Journal of Agricultural and Applied Economics, 39(2): 365-372, August.
- Jensen, K., C.D. Clark, P. Ellis, B. English, J. Menard, M. Walsh, and D.G. De La Torre Ugarte, 2007. Farmer Willingness to Grow Switchgrass for Energy Production. Biomass and Bioenergy, 31(2007) 773-781. October, 2007.
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Progress 01/01/06 to 12/31/06
Outputs
The POLYSYS and IMPLAN models have been integrated to estimate the agriculture and economy wide impacts of increasing the production of feedstock for energy. The modeling system resulting has allowed the analysis of several scenarios to increase the participation of agricultural feedstock in the portfolio of renewable energy sources into the year 2025 and beyond. In addition, the analysis looks at the associated impacts of achieving the goal on the agricultural sector and the nation's overall economy. According to the U.S. Dept. of Energy (DOE), estimated energy use in 2005 was 100.5 quads. Based on DOE estimates, the nation will annually consume about 117.7 quads of energy by 2025. To put a quad in perspective, about 4.4 million households would consume a quad of energy through electricity and gasoline use in one year. To meet 25% of the projected 117.7 quads, 29.42 quads (henceforth referred to as the 'All Energy' or AE scenario) are needed from renewable energy
sources. At present, an estimated 1.87 quads are produced from biomass (agricultural/forestry) resources in the production of electricity and/or heat. Based on information from DOE, it is estimated that, by 2025, 12.10 quads will be annually produced from geothermal, solar photovoltaic, hydro, and wind generation. The sum of those two is 13.97 quads. Therefore, to meet the 25'x25' goal of 29.42 quads, an additional 15.45 quads would need to come from agricultural and forestry lands. A second scenario examining the impacts of producing 25% of the nation's electric power and motor vehicle fuels (hereafter the EPT scenario) was also performed. This scenario produced smaller benefits than the 'All Energy' case, with smaller effects on land use and feed crop prices.
Impacts
The 25% goal is achievable. Continued yield increases in major crops, strong contributions from forestry, utilization of food processing wastes, and the use of over 100 million acres of dedicated energy crops, like switchgrass, will contribute toward this goal. Reaching the goal would have an extremely favorable impact on rural America. Including multiplier effects through the economy, the projected annual impact on the nation from producing and converting feedstocks into energy would be more than $700 billion in economic activity and 5.1 million jobs in 2025, most of that in rural areas. By achieving the 25% energy goal, the total addition to net farm income could reach $180 billion. In 2025, net farm income would increase by $37 billion compared with USDA baseline projections. Reaching the goal would have significant positive price impacts on crops. Compared with USDA baseline projections in 2025, national average per bushel crop prices are projected to be $0.71
higher for corn, $0.48 higher for wheat, and $2.04 higher for soybeans. Contributions from America's fields, farms and forests could result in production of 86 billion gal. of ethanol and 1.2 billion gal. of biodiesel, which has the potential to decrease gasoline consumption by 59 billion gal. in 2025. Producing 14.19 quads of energy from biomass and wind sources could replace growing demand for natural gas, diesel, and/or coal generated electricity. These renewable energy resources could significantly decrease the nation's reliance on foreign oil, fossil fuels, and enhance the national security of all Americans.
Publications
- English, B.C., De La Torre Ugarte, D.G., Walsh, M.E., Hellwinckel, C. and Menard, J. 2006. Economic Competitiveness of Bioenergy Production and Effects on Agriculture of the Southern Region. J. Agric. and Applied Econ. 38(2):389-402. August.
- De La Torre Ugarte, D.G., English, B.C., Menard, R.J. and Walsh, M.E. 2006. Conditions that influence the economic viability of ethanol from corn stover in the Midwest of the USA. International Sugar Journal. 108(1287):152-156. February.
- McLaughlin, S.B., Kiniry, J.R., Taliaferro, C.M. and De La Torre Ugarte, D.G. 2006. Projecting Yield Potential of Switchgrass as a Bioenergy Crop. Advances in Agronomy. 90:267-297. Elsevier, Inc.
- De La Torre Ugarte, D.G. and Hellwinckel, C., eds. 2006. Analysis of the Economic Impacts on the Agricultural Sector of the Elimination of the Conservation Reserve Program. Agricultural Policy Analysis Center. The University of Tennessee. Pub # E11-1216-001-07. www.agpolicy.org. September.
- De La Torre Ugarte, D.G., English, B.C., Walsh, M.E., Hellwinckel, C.and R. Jamey Menard. 2006. Economic Impacts from Increased Competing Demands for Agricultural Feedstocks to Produce Bioenergy & Bioproducts. UTIA. Department of Agricultural Economics. Research Series. June.
- English, B.C., De La Torre Ugarte, D.G., Jensen, K., Menard, J. and Hellwinckel, C. 2006. Impacts to the Southern U.S. and the Nation as a Result of Moving Towards a Bio-Energy Future. Abstract in Proceedings of Making a Blueprint for Energy and Economic Development in Appalachia. Huntsville, Alabama. July 13.
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Progress 01/01/05 to 12/31/05
Outputs
Focus in the first year of the project, has been on the analysis and identification of the strategic issues related to the wide spread utilization of cellulose material for the production of bioenergy and bioproducts. Driven by the availability of residues from the production of major crops like corn, the conventional thinking indicates that the use of corn residues should be the stepping stone into the modern biomass conversion of cellulose material into energy and bioproducts. Preliminary findings indicated that, once environmental constraints in the use of corn residues for soil erosion purposes have been met, there is a potential of collecting up to 58 million dry tons of corn stover at about $40 per ton. However, the additional revenue for corn growers would create additional incentives for the planting and production of corn, with a consequent drop in corn prices. Moreover, this drop in corn prices would result in an increase of loan deficiency payments and/or
counter cyclical payments, depending on the price drop. The overall impact is an increase of about 500 million dollars a year in government payments, although this is more than compensated by a billion dollar increase in net farm income due to the revenues from corn stover.
Impacts
As a consequence of the preliminary analysis in this research, and in light to the potential added cost to the taxpayers, the conventional thinking of aggressively pursuing a strategy based solely on the use of corn residues is being re-considered by the federal agencies involved in the Biomass Initiative. Either a deemphasis on utilization of residues, or a combination of such a strategy with an increase utilization or promotion of energy crops could result in a lower cost for taxpayers.
Publications
- English, B., Menard, R.J., De La Torre Ugarte, D.G. and Walsh, M.E. 2005. Economic Impacts of Ethanol Production from Maize Stover in Selected Midwestern States. In Joe L. Outlaw, Keith J. Collins, and James A. Duffield, eds., Agriculture as a Producer and Consumer of Energy. Cambridge, MA: CABI Publishing. pp. 218-231, Chapter 12.
- De La Torre Ugarte, D.G. 2005. The Contribution of Bioenergy to a New Energy Paradigm. EuroChoices, Vol. 4, Issue 3, November. Blackwell Publishing..
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