Opportunities and Challenges of Expanding Agriculture’s Contribution to the Energy Supply Daniel G. De La Torre Ugarte University of Tennessee

Objectives Assess the feasibility and impacts of a significant expansion of bioenergy sector. Identify the opportunities and challenges.

Renewable Energy Feedstocks Renewable Energy Electricity Wind Solar PV and Thermal Land Fill GasAgriculture Hydro Biodiesel Agriculture Ethanol Agriculture

Renewable Energy Electricity Cattle Manure Residues Corn, Wheat Dedicated Energy Crops Digester Dairy, Poultry, Hogs Mill Wastes Forest Residues Biodiesel Oilseed Crops Yellow Grease Tallow Beef and Poultry Ethanol Corn Residues Corn and Wheat Dedicated Energy Crops Forest Residues Food Mill Wastes Renewable Energy Feedstocks From Agriculture

Hypothetical Ethanol Demand 50 Billion

Assumptions for a Potential Outlook Yields: Major crops continue w/ trend line Energy crops (6 to12 dt/acre) Farm practices: Increase use of no-till and reduced till Land: Use cropland only Baseline: Extended 2005 USDA Baseline Commodity Programs: as specified in 2005

Feedstock for Energy* * Does not include forest harvest

Land Use 2006, 2015, and 2020 Land Use 2006, 2015, and 2020 ( million acres ) Corn Soybeans Wheat Energy Crop Hay Other Cropland in Pasture

Average Commodity Prices

Tons Distribution of the Production of Cellulosic Materials, 2010

Tons Distribution of the Production of Cellulosic Materials, 2020

Changes in Net Returns and Government Payments (million $)

The Opportunities Agriculture can face a long period of sustain expansion in demand. Bio-energy feedstocks could be a new $12 billion industry (net returns). Great potential for rural development Savings in government payments of $6 to $50 billion.

Key Challenges  Food Security Transformation of industrial livestock production Positive contribution to food security  Environmental Sustainable feedstock production Protection of tropical forests  Social Who will accrue the benefits of the “new ethanol industry”? What benefits for Rural America?  What role for international trade?

Conclusions  America’s agriculture can play a key role in energy supply without impacting food security  An expanding Bioenergy industry could produce: Increased Farm Income Reduced Government Payments Increased Rural Economic Development Enhanced Environmental Benefits Reduction in Foreign Oil Dependency  HOW this potential is pursued matters: social and environmental impacts

Agricultural Policy Analysis Center Bio-based Energy Analysis Group Department of Agricultural Economics, Institute of Agriculture University of Tennessee