Archive for Agriculture

The Nitrogen-Biochar Link

by Tom Konrad, Ph.D.

Promoters of Biochar should ally with fishermen and other groups concerned about ocean dead zones caused by nitrogen runoff.

The folks at the Carbon War Room are trying to save the world by tackling the trickiest problems in addressing climate change.  One of their current focus points is biochar [pdf].  I’m one of very few investment writers who has taken notice of biochar so far, and they called me to ask what I thought needed to be done to bring in private investment dollars. 

Getting investors interested in biochar is going to be tricky.  The problems are three-fold:

  1. The science of biochar is not yet well understood.
  2. An agriculturalist who uses biochar only gains a fraction of the total benefit; other benefits are positive externalities felt far and wide. 
  3. Creating biochar is fairly low-tech (you can get plans for a charcoal burner on the internet, and make one in your back yard.)  This makes it difficult for companies to profit from it by producing and selling superior technology.

My third point about producing biochar being low tech may not turn out to be a problem.  I ran a draft of this article by Jonah Levine, an industry insider, currently Vice President of Technical Sales at Biochar Engineering, a technology startup.  He says, "The biomass industry is used to driving biomass to ash to garner all of the potential energy benefits. Driving off H and N from the biomass and leaving as much C as possible in a continuous, automated process is not simple. The reaction would like to either take off and reduce everything to ash or not start at all."

If my first two points can be addressed, creating a market for quality-controlled biochar, and portable biochar producing units like Biochar Engineering’s  technology can be produced at a cost low enough that the extra char yield compensates for the extra production cost of the pyrolyzer, then there will be investors interested in biochar, and much more funding will be available.

The Carbon War Room is already supporting research to flesh out the science, and they are working to get biochar included in the World Bank’s biocarbon fund, but I was able to give them one idea: work with others concerned about nitrogen runoff from the overuse of fertilizer to get stricter restrictions or fines imposed for nitrogen runoff.

Nitrogen Runoff

Nitrogen runoff is a massive environmental problem, if not on the same scale as global warming.  Farmers often use more fertilizer than their plants really need because the costs to them of using too little (low yields) outweigh the costs of using excess fertilizer.  Incentives that increase the price they get paid for producing corn and other nitrogen intensive crops only aggravate this tendency, since they increase the benefits of high production without changing the costs of excess fertilizer use. 

The excess fertilizer is not taken up by the plants, and instead runs off into the river system, causing marine dead zones, and contaminating freshwater sources.  This increases the costs of water purification as well as harming people and livestock who drink the untreated water, and is the cause of "blue baby" syndrome.

Biochar and Nitrogen

Biochar, used as a soil amendment, improves water and nutrient uptake by plants.  It has its greatest effects in poor soils, helping the plants access the nutrients that are available, and this effect can last for centuries after the soil has been amended with biochar.  Biochar-ameneded soil should reduce the risks to farmers of using too little fertilizer, and hence reduce the incentive to over-apply, benefiting both the farmers and everyone else in the watershed.

Studies suggest that fertilizer taxes are the most economically efficient way to reduce Nitrogen runoff.  If such taxes were in place, farmers would have a stronger incentive to use biochar in order to make the most of the suddenly more expensive fertilizer.  For environmentalists interested in reducing carbon emissions, this would have the added benefit of reducing nitrous oxide (N2O) emissions from heavily fertilized soils, for an additional reduction of greenhouse emissions.

Hence, Biochar advocates should team up with groups concerned about the fisheries and health effects of runoff to advocate for higher taxes on nitrogen fertilizer.  When farmers complain, perhaps we can buy them off by using the revenue for a biochar subsidy?

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Ethanol, Cellulosic Ethanol, and Advanced Biofuels

Last week, I attended the 2009 Fuel Ethanol Workshop and the Advanced Biofuels Workshop, writing two articles.  The first is a commentary on what the corn ethanol industry needs to do to rehabilitate its image, and the second looks into how the stock investor can benefit from emerging advanced biofuel, cellulosic ethanol, and
algae technologies.

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Flying too Close to the PetroSun

Algae is the most promising source to produce oil in the quantities needed to displace any significant amount of petroleum. Can is Petrosun (Pink Sheets: PSUD) the company to fulfill this promise? I doubt it; follow the link to find out why.

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Corn is For Ethanol, Grass is for Cows

Last year my wife and I read Michael Pollan’s The Omnivore’s
Dilemma
, and it changed we eat.  My wife was greatly affected by how animals are mistreated in production farming, while I was attracted by the health
benefits of eating grass fed beef
and other foods grown in the manner to which they are evolutionarily adapted, as well as by the lower degree of harm to the environment.  We haven’t become all-natural, all-organic, all-the-time at the Konrad household, but we’re now much more willing to pay more when we have the opportunity to do so for food which we consider healthier and more environmentally and morally sound.  For a world-class tightwad like myself, being willing to pay more is a considerable step.

In any case, the book also got me thinking more sympathetically about the ethanol industry, because it serves as a relatively benign outlet for the mountain of corn produced by America’s insane farm policies.   I find rising price of corn and other grains is more a cause for celebration than despair, because I see current prices more as a return to sanity rather than a likely cause for starvation.  Even in the third world, low agricultural productivity is (in part) due to a lack of incentive to compete with subsidized first world production, rather than an inability to grow enough food.  The market for corn has been massively distorted by oversupply caused by too many subsidies.  Ethanol represents a new source of practically inexhaustible demand which is restoring balance to a market too long out of kilter.

One practice which the massive flood of cheap grain begat was feeding corn to cattle.  In my AltEnergyStocks
column this week, I look at one way I think the market may be starting to find its equilibrium again.  As corn prices rise, there will be less incentive to fatten cattle in feedlots (or Concentrated Agricultural Feeding Operations, CAFOs ad Michael Pollan calls them), and more to feed them grass.  I believe that long before we can perfect the art of using energy crops such as switchgrass to make cellulosic ethanol on a commercial basis, the rising price of corn will make it economic to feed those same energy crops (i.e. grass) directly to cattle, more than doubling the amount of corn currently available to the ethanol industry.

Click here to read the entire column.

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Diversification: Nature Knows Best

A study  in Science (see article in Renewable Energy Access) from David Tilman, an ecologist at the University of Minnesota shows what we should have known all along:  When energy crops are grown sustainably in poor soil (i.e. most of our available land) without fertiliser, a diverse mix of native prairie plants yeilds more than twice (238%) as much harvestable energy than any monoculture (including the much-hyped switchgrass) grown on the same land.

At some point, humans are going to have to realize that our production-line mentality, which seems so efficient to us, is not really the best way to do things.  We like farming just one species in neat rows because it’s easier for us to comprehend.  But easier to comprehend is not the same as more effective.  In money management, we know that there is no one perfect security for an investor: diversification allows higher returns with lower risk.  Farmers have yet to (re)learn that lesson: growing just one crop puts strains on the particular resources that crop needs most, and allows specialized pests an environment of limitless growth.

Monocultures are sub-optimal, both in your fields and your portfolio.   Enron employees with their retirement fund in 100% Enron stock learned that the hard way.  As we transition to a new energy economy, I hope that David Tillman, and researchers like him will help us realize that the places we grow out energy crops don’t have to be like an Enron employee’s 401(k).

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Vision of a sustainable energy future

I’ve been meaning to write an article outlining a vision of a sustainable energy future, where biomass is converted into fuel and electricity through pyrolysis and the waste product, carbon is used as a fertilizer a-la terra preta to produce more biomass.  The good news is I don’t have to.  The Engineer Poet did, and it’s just part of a much broader vision you’ll find here.   He also goes into a great discussion of transportation technologies and efficiency which would never have made it into the article I’d write.  I like it when other people crunch numbers, so I don’t have to.

Give yourself a half hour to read the whole article.  It’s worth it.

( Terra Preta: I got a comment from Erich J Knight on terra preta here that went into a lot of depth, but I deleted it by mistake.  Forturnately, he says pretty much the same thing in his blog.  I first heard about terra preta from Ron Larson, chair of the American Solar Energy Society, who is very active in the local (Denver) renewable energy scene.  If you haven’t heard about terra preta, and are concerned about globabl warming or soil fertility without fertilizers from fossil fuels, it’s worth looking into.)

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Good Ethanol

I wrote a blog a couple months back talking about how environmentalists should avoid lumping all ethanol together as “bad” renewable energy because the Energy Return on Energy Investment (EROEI) is very low.  First of all, new ethanol plants being built today do have a net energy gain on a well-to-wheels basis (the critics are using decade old data), and so long as the energy inputs come from renewable sources, ethanol looks like a decent way to turn other forms of renewable heat energy into something we can put into our tank and drive around with.

E3 Biofuels is doing just that with a 25 million gallon “closed loop” ethanol plant in Mead Nebraska.  The distiller’s grain byproduct of the ethanol production is fed to cattle at an adjacent feedlot.  This saves energy by avoiding having to dry the grain and transport it to where the cattle are.  The manure from the feedlot is passed into an anaerobic digester which not only produces 100% of the energy necessary for the ethanol distillation process in the form of methane, but it also helps solve the nasty environmental problems caused by the massive supply of manure feedlots produce.  It was runoff from cattle manure that caused the problems with our spinach supply recently.

Other benefits are that by running the manure through the digester, odor is reduced, and methane from the manure decomposition does not escape into the atmosphere.  Methane is a much more potent greenhouse gas than is CO2.

If you believe the promoters that “This plant will make ethanol more than twice as energy-efficient as any other method of producing ethanol or gasoline,” I estimate that the well-to-wheels EROEI is between 2 and 4 (probably closer to 2.)  It’s not the great EROEI’s we get from Wind and geothermal, but it’s a liquid fuel we can use in our existing vehicle fleet (either as E85 in Flex-Fuel vehicles, or as E10 or E20 in standard gasoline engines.)

Without liquid fuel, we’re in great danger of economic disruption due to peak oil, but unless we get that liquid fuel in a manner less carbon intensive than conventional corn ethanol, we’ll be up to our ears in melted icecaps.

Obviously, what we really need is much more energy-efficient cellulosic ethanol which does not compete with our food supply for feedstock, and it will be great if that process is powered by renewable heat (methane form digesters, or solar thermal) but given that we’re unlikely to stop eating beef anytime soon, this is an elegant, closed process.

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Off topic agian – back on Spinach and E-Coli

There’s an excellent article by Michael Pollan, author of the Botany of Desire and The Omnivore’s Dilemma in the NY Times Magazine from last weekend.   It ties in nicely to my thoughts on Spinach and E-Coli from a couple weeks ago. 

 Unfortunately, it does not have a lot to do with investing or alternative energy, so feel free to stop reading now, if that’s why you’re on my blog. 

If you’re worried about the industrialization of our food supply, and don’t want to get more worried, you probably should find another blog to read as well.   Here are the main points I got out of it:

1) Industrialized farming is the root cause of the health problems we’ve been having with our veggies.

2) But the likely proposed solution is not less industrialized farming, but more.

 3) The problem has to do with the industrial mindset of the regulators. 

4) Yikes!

Read the Veggetable-Industrial Complex article.  If you can figure out something to do about it, leave a comment.

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Should there be a tariff on foreign biofuel?

Apparently, the consensus of the 25x’25 biofuels working goup I spoke of over the weekend was an illusion based on the fact that the opponents had not spoken up and we had moved on to other subjects.  We’re currently discussing the subject over email, and I thought my rationale for opposing a tariff was worth posting here:

1. Why a tariff on foreign biofuel would not be effective at raising the price for domestic biofuel:
The primary competition for domestic biofuels is not foreign biofuels: it is petroleum.  Petroleum will remain the primary competitor in a 25x’25 world (after all, it will have around a 75% market share.)  The price of both foreign and domestic biofuels will be set in competition with gas and diesel, the most commonly available substitutes.  To raise the price of domestic biofuels, a tariff would have to be placed on foreign oil, not just foreign biofuels.

2. Why a tariff on foreign biofuel would be counter to the 25x’25 goal:
Potential builders of distribution infrastructure for biofuels (pipelines, retail pumps, Flex Fuel Vehicles, etc) want to know that there will be a reliable supply before they build distribution.  While some might argue that a tariff would not impact supply (an argument which, if true, would re-enforce point #1), it is very difficult to argue that it would not negatively impact the perception of the availability of reliable supply.  It is the perception of reliable supply that will help get the distribution infrastructure we need built.

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25x’25

I spent much of the last week at the 25x’25 “Twenty-Five by Twenty-Five” second implementation planning meeting.  25x’25 is a coalition advocating the vision that “By 2025,
America’s farms, forests and ranches will provide 25 percent of the total energy consumed in the
United States, while continuing to produce safe, abundant, and affordable food, feed and fiber.”   That’s at least 25% of our energy from renewable sources.

            25x’25 is an open alliance; the participants are the organizations who have endorsedthe 25x’25 vision outlined above.  These include 18
US Senators, 91 Congressmen, 18 state governors, 4 state Legislatures (including
Colorado).  I attended the conference as the representative of the
Colorado Renewable Energy Society. 

            I highly encourage my readers to endorse 25x’25 (you can endorse as an individual, or as an organization, or both.)  Your endorsement helps them demonstrate that a broad swath of Americans support the 25x’25 vision, and will help convince the US House and Senate to pass the concurrent resolutions for 25% of the nation’s energy supply to come from renewable sources.

We are currently in the process of coming up with our vision of how
America can achieve 25x’25.  Any endorsing individual or organization can participate.  The goal is agree on a series of recommendations (the Implementation Plan) as to how we can achieve the 25x’25 vision.  When the Implementation Plan is complete, which we plan to achieve by January, in time for the next congressional session, all partners will have a chance to endorse the plan.

Since the whole process is by consensus, and the 25x’25 goal is an ambitious one, it would be easy to believe that the Implementation Plan will turn out to either be watered down to the point where it does not say anything, or end up endorsing so many points of view that it would be ludicrous to call it a plan at all.

Having now participated in two conference calls and two days of face-to-face meetings, I’m happy (and somewhat surprised) to report that we’re actually managing to form a consensus among a large group of people and organizations you would not expect to get along under ordinary circumstances.  For this, I can only shake my head in wonder at the diplomacy and perseverance of the Steering Committee.  They managed, though two days of what could have turned into a verbal free-for-all, to keep us all focused on the need to work together to reach the very ambitious goal we’ve all agreed upon.  (In that same spirit, and understanding that many of the participants have been willing to voice their true opinions and step away from the party line, I will not name any names here.  This also has the advantage of covering for my lousy memory for names.)

How do they do it?  By keeping us focused on the fact that we all agree on the goal: 25% of our nation’s energy from renewable sources by 2025, and reminding us that we’re never going to get there by half measures.   The second thing they did was keeping the discussion focused on “Yes, if…”: continually reminding people to stay in the mode of working together, and instead of thinking about all the reasons that something was impossible to accept, to instead say “I could accept that if it were this were also to happen.”

So my kudos to the people I met on the steering committee.  I was impressed.

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Cows, Spinach, and E-coli

This is a little off topic, but I was really affected by this op-ed piece from the New York Times.

The E-Coli that has put us all off spinach for the last couple weeks apparently comes from cow manure of grain-fed cows.  The solution, Nina Planck effectively argues, lies in the hands of stockyards, not spinach growers, and the blame and remedies should be their responsibility.

 If cattle are fedon grass for one week, this dangerous form of e-coli dies back 1000 fold.  This would make their meat much safer, and longer periods on grass, or perhaps alternating cycles on grass and fattening grain might be enough to make us safer safer eating our leafy greens.  It also might save the Salinas Valley growers, who are getting a bad reputation because of their cattle yard neighbors’ inability to control their sewage.

This a case of what economists call externailities.  The cattle yards do not bear the cost of escaping manure laden with acid-loving e-coli.  The spinach farmers do pay the cost, but they cannot dictate that the cattlemen control their own pollution.  That’s the FDA’s job, which it is clearly falling down on.  (To get back on-topic for a moment, another example of an externality is CO2: emitters don’t pay the price, so we all do in the form of global warming.)

The fact that spinach farmers pay the price for slightly cheaper beef, while we (through the FDA) pay subsidies of holding ponds that aren’t doing the trick (we should be building anaerobic digesters anyway) is what really bothers me.

I’m not a person who believes we should all go back to nature, but we have to acknowledge that when we take animals and force them to our ends, there will be unforeseen consequences, and simply trying to control things by engineering will always fail some of the time; it is best to reduce the risks (in this case, by keeping cattle from eating grain all the time), as a supplement to the engineering of holding ponds (or digesters.)

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There’s Ethanol and then there’s Ethanol

In the renewable energy community, Ethanol has a bad rap, due to some often-quoted, seldom checked studies on energy payback.

It’s received wisdom that ethanol from corn has an energy return on energy invested (EROEI) of somewhere between 0.8 and 1.0; i.e. you get less out than you put in.  The persistence of this idea is possibly due to some great cartoons.  I’m probably going to undermine my whole argument here, by including this one…

Then again, I expect that my audience is highly intelligent, and not easily distracted.  If you weren’t, you probably wouldn’t still be reading my extremely dense and often-tortured prose.  You deserve a good cartoon every now and then…

Back in the world of ethanol, times have changed.

Even though cellulosic ethanol is still very much in its technological infancy, a lot of companies and people are doing a lot of interesting things with corn ethanol to make the process more efficient, and, get those energy inputs in the form of “free” waste heat from some other process, or from renewable sources such as cow manure or landfill gas.

I’ve been educating myself a lot about this reading C. Scott Miller’s Bioconversion blog.  I admit I’m having to do a lot of catch up on this, because I was one of those people who believed ethanol was a total government subsidized boondoggle until recently.

All that said, even at an EROEI of 1.25 to 1.8, ethanol is not much of an energy “source.”  Sure, we’re getting a little energy out of the process, but one way to think about EROEI is how much effort it takes to get our energy. 

As a rough illustration, at an EREOI of 2, there has to be one person working to get energy for every person doing something else.  So if civilization were to exist one out of every 2 people would have to be employed in the energy sector… the other 50% would then have the energy they needed to do other useful things, like be doctors, politicians, soldiers, engineers, builders, investment advisers, bloggers, artists, manufacturers, scientists, psychologists, food farmers (as opposed to energy farmers), talk show hosts, etc.

 You might argue that some of those professions aren’t very useful (investment advisors and politicians perhaps), but even if we eliminate all those “useless” professions, I think the more useful professions like talk show hosts and artists might start finding themselves a little squeezed.

There is a reason that the human race was 95%+ farmers or hunter gatherers for most of of our history: the energy sources we were using were not powerful enough, with too low EROEI to sustain higher forms of civilization, such as talk show hosts.

If you don’t believe me, read this great article on “Peak Wood,” the cause of the iron age.

Back to ethanol: it’s not going to solve our world energy problem.  It’s a useful way to turn non-liquid fuels (manure, biogas, or coal) into something you can put in your car, but if we in the U.S. are  looking for a domestic source of energy that will wean us off the Middle Eastern oil teat, we can do it, only if we want to be a nation of farmers, witha much smaller population and lower standard of living than we have now.

Ethanol is big business these days, and it will make a tiny dent in our oil addiction, so all the investment is probably doing some good.  I predict that the biggest beneficiaries will be the farmers, and considering how hard farming is, that’s not a bad thing.  It’s probably better than out-and-out farming subsidies.

Basically, I’m no longer worked up about ethanol subsidies and mandates.  There are a ton of better ways we could be spending the money, but it’s hardly the stupidest thing our government does with our money.   I’d even be happy about it if they’d simply replace the money spent on all farm subsidies with subsidies for farm based energy.

I just don’t want it to distract from the important work we have to do to deal with the twin probems of peak oil and global warming:

  1. Improve energy efficiency (especially of our vehicle fleet.)
  2. Develop high ERoEI energy technologies: Wind, Solar concentrating, Geothermal.  PV will probably make it on this list as the technology improves.
  3. Displace some of that oil in transport with renewable electricity, via plug-in hybrids.  (Economic fuel cells are still too far away to make hydrogen a viable transportation fuel in the next 20 years)

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Distributed Water

Ever since the green revolution of the middle of the last century, food, at least in the developed world, has not been a scarce commodity.  By the introduction of more productive varieties of cereals, mechanization, as well as the (often unsustainable) application of chemical fertilizer and
irrigation, yields increased dramatically, leading to food becoming a smaller and smaller portion of the budget of the first-world 
 consumer.

 

That green revolution has gone about as far as it can go.  A combination of more erratic and warmer weather due to global warming, and the over-exploitation of aquifers are making water for farming a much scarcer resource.  Meanwhile, rising fossil fuel prices due to increasing demand, combined with flat or diminishing supplies are making chemical fertilizer a much greater cost to the farmer, as well as making it much more costly to run farm equipment.

 

On top of this, biofuels are a new and growing source of demand for agricultural products. 

I see a new pattern emerging.  Water, food, and energy are each becoming scarcer, and as it becomes easier to convert one into another of the triad, their prices are becoming increasingly coupled, as they rise in unison.

 

I’ve written elsewhere how conventional electricity generation technologies require vast amounts of water.   Biofuels allow us to use food as energy.  As cities turn increasingly to desalinization, energy can be converted to potable water.

 

Rising energy prices are generally a good thing (so long as they don’t rise too quickly), in my mind, because they increase the incentives to switch to new, less polluting forms of energy.  Rising food prices will be a force for rural revitalization in the rich world, and may make third world farming more economic… so long as they have reliable access to water, which makes wise investment in water infrastructure all the more important.

 

A study from the Consultative Group on International Agricultural Research finds that large scale water projects are much less cost effective than small scale efforts.  I can’t find a link to the study, but here are some excerpts from the Economist article where I read about it.

 

A recent study of vegetable farmers in
Ghana, for example, found that those irrigating their fields with wastewater carried by buckets earned a 230% return on their investment, versus 30% for big state-sponsored schemes.

 

The assessment argues that modest outlays on rain-fed agriculture, in particular, could drastically improve the productivity of farming in poor countries and so help both to raise farmers’ incomes and also to cut the need for an expansion of agriculture elsewhere. More than half of the world’s food comes from rain-fed farms, as opposed to irrigated ones. If the rains fail, so do the crops. Channels to harvest and direct rainfall and small, sealed reservoirs or tanks to store it, would not only see farmers through dry spells, but also allow them to entice bigger or more valuable harvests out of the same fields. More reliable income, in turn, allows farmers to invest more in seeds, fertilizer and machinery.

 

Like our energy infrastructure, our water infrastructure needs to become more diverse and distributed.  “Think globally, act locally,” as they say.  I like to add, “Unless you can act globally,” which is what the financial markets allow us to do… but this is one problem that the financial markets are not suited for.  Just because I have a hammer, does not mean every problem is a nail, and wishing it were so will not change that.

 

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Over the limit on ethanol?

What are the limits on ethanol production? 

According to NREL’s John Sheehan, at this months Energy Analysis Brown Bag, ethanol production from corn is set to reach 4 billion gallons this year, and 7.4 billion gallons per year by 2011, based on current and planned production capacity.  (As an aside, on August 10, the Douglas County News-Press published a very pointed editorial from him on the travesty of IREA funding disinformation about global warming.)   Given that a bushel of corn will produce 2.8 gallons of ethanol, that will make ethanol demand for corn in the
US 1.4 billion bushels in 2006, and 2.6 billion bushels in 2011.  Since the annual corn production in the
US is around
11 billion bushels, ethanol production is already having a significant impact on the price of corn for food.

As Lester Brown, President of the Earth Policy Institute pointed out in the Aug 21 issue of Fortune(the particular article I’m referring to does not seem to be available online), the market is already setting the price of agricultural commodities at their oil equivalent value.

Unlike Lester Brown and John Sheehan, I think this will be a good thing for the world’s poor.  Yes, food prices will go up, but the poor are not only consumers of food; they are also producers and potential producers.  In the
US, the percentage of poor rural residents has been
consistently higher than the percentage of poor urban residents throughout the last 50 years.   In
Africa, the world’s poorest continent, farmers can often not make a living because they
cannot compete with subsidized first-world farmers.

If world food prices rise because of demand for biofuels, this may at last reverse a great injustice, where subsidies for first world farmers have prevented third world development.  Allowing myself to get wildly optimistic for a moment, if fuel demand permanently boosts agricultural commodity prices (which seems very likely), that might even open the way to removing subsidies for European and North American farmers.  The Doha round of world trade talks failed in large part because of rich world unwillingness to cut agricultural subsidies, which is a great shame, because cutting subsidies would be a great boon to first world taxpayers, as well as third world farmers.

I think the best way to play the biofuels boom as an investor is by betting on the trend of rising agricultural prices.  While large agricultural companies like ADM have already seen the benefits of this trend, the currencies of third world agricultural based economies should benefit, as well as the price of agricultural land in the US.  Much US farmland may benefit twice from renewable energy, since land in windy areas also has the opportunity to gain income from wind leases.  This was a large part of the theme of the Intermontain Harvesting Energy Summit I attended this spring.

On the downside, stimulating agricultural production can lead to deforestation.  Greenpeace can push for all the moratoriums it wants on soy from deforested areas, but that won’t keep soy oil or ethanol from deforested areas going into our tree-hugging gas tanks.  Global commodities, such as soy, corn, soy oil, and ethanol will just go to countries and companies who don’t participate in the boycott, removing their demand from the world market, and lowering the world price for everyone else.  This is the same principle we use in our favor when we buy Green Power: the actual electrons running my laptop are probably from a coal fired plant, no matter if I pay for green power or not.  What I’m actually purchasing with green power (in theory… may green power markets still have kinks that need to be worked out) is the fact that I’m stimulating green power production as much as I would if all my power actually did come from green sources.

Another worry about the rapidly rising biofuels capacity is distribution.  John Sheehan’s estimate of 7.4 billion gallons of ethanol in 2011, and 700 million gallons per year of biodiesel would amount to a around 5% of gasoline consumption and less than 2% of diesel consumption.  Since the current fleet of engines can run with no problem on 10% ethanol (in
Brazil “gas” typically contains
25% ethanol.), we would not need to use any E85 to use all the planned ethanol production.  Similarly, B20 can be used in all but the coldest parts of the country year round, so converting just 2% of diesel consumption to biodiesel could also be accomplished through existing distribution.

I find it likely that the constraints on biofuel production will come in the form of the price of the feedstock, which will be driven by oil prices.

While ethanol and biodiesel will be necessary parts of weaning us off our dependence on oil, current technologies cannot go very far to getting us there without a much greater push towards more efficient automobiles.  Raising average fuel economy by just 10% would reduce fuel use and greenhouse gas emissions over twice the amount the flat-out biofuels production we’re seeing will. 

We can easily double the fuel efficiency of our current fleet with a combination of plug in hybrids (powered by cheap wind) and more efficient engines.  Only when we’ve done that can we hope that cellulostic ethanol and biodiesel can start to supply our remaining fuel needs. 

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