1. Potential of Cotton for the Production of BioEnergy “Texas as a Case Study” Bill McCutchen, Ph.D. Deputy Associate Director Texas Agricultural Experiment Station Texas A&M University System

2. Overview of Bioenergy and Feedstocks Ethanol and Biodiesel Status Texas as a “Case Study” What’s the Future of Cotton and Seed in Bioenergy? Outline

3. Rate of Use 0%10%15%20%5%25% Oil Reserves Updated July 2005. Source: International Energy Annual 2003 (EIA), Tables 1.2 and 8.1-O&GJ. Canada’s reserves include tar sands. The United States uses more oil than the next five highest-consuming nations combined. 3% 7% 25% 7% 3% 2% 3% 5% 6% 8% 9% 10% 14% 21%

4. Presidential Goals 2012: Make ethanol practical and competitive. 2025: Replace 75% of all Middle Eastern oil imports. 2030: Replace 30% of current U.S. petroleum consumption with biofuels. Can we produce the required 1 billion tons of biomass needed to produce 60 billion gallons of ethanol a year?

5. Biofuels & Potential Sources Ethanol & Other Alcohols –Grain (corn) –Cellulose (other crops and grasses) –Plant and animal waste Biodiesel –Seed oil (sunflower, cotton) –Animal fat and plant oil –Algae

6. Overview of Bioenergy Ethanol and Biodiesel Status Texas as a “Case Study” What’s the Future of Cotton and Seed in Bioenergy? Outline

7. Midwest—9.1 Billion gal/yr in Production or Construction South—Only 575 Million gal/yr in Production or Construction Source: Renewable Fuels Association Source: Iowa State University. Ethanol Refining is Concentrated in the Midwest.

8. Availability of Grain for Ethanol Production in Texas Texas gasoline consumption is approximately 12 billion gallons per year (2004 data) or 533 gallons per capita. Would require that 440 million bushels of grain be converted to ethanol/year just to provide for a 10% blend. All feed grain harvested in Texas in 2005 was 322 million bushels, with a potential yield of 860 million gallons of ethanol.

9. Status of Cellulosic Biofuels* Cellulosic conversion technologies should be technically and economically viable within 3-6 years. –One of the primary variables for industry is the cost to produce the most efficient enzymes for cellulosic conversion to alcohol fuels. –The DOE has just announced guaranteed loans to build the first 6 pilot plants in the U.S. Two other significant variables for the successful development of a viable cellulosic biofuels industry are –Feedstock supplies (e.g., tonnage, composition) –Logistics of producing, harvesting, storing, and transporting cellulosic feedstocks *Enzyme-based cellulosic conversion

10. High-tonnage Sorghum TAES research endeavor for >4 years Emphasis on biomass production Benefits –Long Canopy Duration –Drought Tolerance –High Biomass Accumulation (expect >20–30 tons/acre) Considerations –Uses existing equipment –BUT requires Cellulosic Conversion Technology 2006 Field Trial, College Station, Texas

11. Biodiesel Consumption About 20% of motor fuels used in the United States are diesel and equates to about 45 billion gal/yr If all of the U.S. soybeans (3.1 billion Bu) were processed, the yield would be about 4.5 billion gal/yr Biodiesel Refining is Dispersed across U.S.

12. Outline Overview of Bioenergy Ethanol and Biodiesel Status Texas as a “Case Study” What’s the Future of Cotton and Seed in Bioenergy?

13. Texas Leads the Nation in Biodiesel Capacity 13 plants in production with 9 more “on the books” Texas’ current capacity = 99 Million gal/yr with additional 89 Million gal/yr from plants under construction Cottonseed Oil Mills at Harlingen, Elgin Lubbock, & Quanah Feedstocks –Soybean oil –Used cooking oil –Fats and grease –Animal tallow –Cottonseed oil –A blend of feedstocks

14. Texas Cottonseed Texas is not a major oilseeds producer BUT Texas is #1 in the nation in cotton production –6 million acres planted annually –Though low in oil content, potential oil yield of Texas cottonseed is 110 million gallons/year –Much cottonseed is fed whole to ruminants and not crushed for oil –Beef cattle production, feeding is the largest Ag industry in Texas

15. Texas - Cotton Facts ~6 million acres with ~5 million harvested acres Harvested cotton is 60% seed, 40% lint by weight 947 lbs/ac seed yield 18% or 22.5 gal/ac oil yield Cottonseed is not the answer for biodiesel production in Texas!! (in most cases) So What’s the next step?

16. Economic Opportunity for Texas Farmers with Oilseed Crops Oil yield of current feed and food crops cannot meet demand from industrial and biofuel sectors Although Texas has had little applicable research in alternative oilseeds/oil crops alternative feedstocks are being researched These crops and research crops hold potential for –Biofuels to meet needs of biodiesel plants –High-value industrial lubricants and waxes that can replace some uses of petroleum

17. Meeting Market & Industry Needs Dedicated energy crops must have significantly higher oil yield as a percentage of seed yield and be “regio-specific” To meet industrial needs and that of the farmers producing the crops, oilseeds should have yields at or exceeding 100 gallons/acre

18. Biomass and Geographical Diversity Cotton 5–6 M ac

19. The Next Generation of Biodiesel Feedstocks Algae – 15,000 gallons/acre Canola – 125 gallons/acre Castor – 113 gallons/acre Sunflower – 90 gallons/acre Jatropha – 75 gallons/acre Soybeans – 63 gallons/acre Cottonseed – 38 gallons/acre

20. Outline Overview of Bioenergy Ethanol and Biodiesel Status Texas as a “Case Study” What’s the Future of Cotton and Seed in Bioenergy?

21. Cotton as a Bioenergy Feedstock? Issues Related to Using Cottonseed –High demand as whole seed for livestock feed –Important vegetable oil for food –Relatively low oil yield per acre Fiber has traditionally and will have a greater value per pound than oil

22. Issues Relating to Cottonseed (continued) Breeding efforts have targeted high lint yields and small seed size Seed size has been reduced about 20% over the last 20 years Current oilseeds (cotton, soybean) have low oil content: <19% Cotton oil yield is low: <40 gal/ac Current oilseeds (cotton, soybean) have low oil content: <19% Cotton oil yield is low: <40 gal/ac Oil yield of feed and food crops like cotton cannot meet demands from industrial and biofuel sectors

23. Opportunities/Challenges for Cotton Moats could be a premier feedstock for cellulosic conversion Cotton gin trash is a candidate for cellulosic conversion Cotton gin trash is a also candidate for thermal conversion

24. Opportunities/Challenges for Cotton Biodiesel conversion technology may fit for some operations Could be a fit for off-quality cottonseed oil Technology advances could increase interest in conversion

25. Opportunities/Challenges for Cotton What is the highest and best use? When does a high-quality food product become a fuel? $$$$$$$ Don’t forget cellulose !!!!!!!! What is the future of tax incentives? Where is all this headed? $/barrel

26. Research Objectives, If “We” Proceed Investigate oil properties of oilseed crops –Identify genetics to optimize oil yield and quality for biodiesel and industrial lubricants and waxes Cotton has made massive improvements in lint yield in the last 20 years –Cottonseed—a “by-product” that received little attention from plant breeders –Seed size has declined (in the last 20 years in Texas, cottonseed-to-lint ratio decreased from 1.0 to 0.667)

27. Bioenergy Research Initiatives Development and evaluation of designer bioenergy crops, in order to: –Minimize inputs Drought tolerance and pest resistance –Maximize outputs Biomass or sugar –Maximize fuel produced per unit Evaluation of residue feedstocks –Cotton gin by-products –Corn stover and rice hulls –Forest residue Evaluation of economic and policy are key variables

28. The Bottom-Line The “Bioenergy Field” is highly dynamic and evolving Feedstocks for bioenergy (fuels or electricity) are “regio-specific” Cotton may have a role to play in –Gin trash for ethanol or electricity –Cellulose from “de-linting” –Seed for biodiesel in limited and economically viable locations There are no definitive answers – case by case based on location

29. Cotton as a Biofuels Crop in Texas or Elsewhere? When It’s Economically Viable