AACC International October, Director, Center for Crops Utilization Research and Beyond. Larry Johnson. Director, BioCentury Research Farm

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1 Center for Crops Utilization Research AACC International October, 2010 The Bioeconomy 2010 and Beyond Larry Johnson Director, Center for Crops Utilization Research Director, BioCentury Research Farm

2 What is the Bioeconomy? The bioeconomy is the way society will obtain vital sources of carbon and energy, in the process dramatically reduce our dependence on imported petroleum. Agriculture will make this transformation possible by providing biorenewable bl resources to produce biofuels and biobased products.

3 Motivation for a Bioeconomy Excess agricultural production Especially in U.S., but many countries are becoming self sufficient in food production Environmental quality Local and regional (smog, acid rain, waste disposal) Global climate change National security Reduced reliance on foreign cartels Rural development Rural economies are not thriving in many parts of the world High petroleum prices Now makes economic sense Source: USDA NRCS

4 New Realities in Corn and Petroleum Prices June 28, 2008 $147/brl Summer, 2010 $70-85/brl Summer, 2010 $ /bu June 28, 2008 $7.88/bu

5 What has Changed in Relative Prices of Petroleum to Corn? Summer 2010 $80/brl $3.60/bu = 22 bu/brl

6 Ethanol Plants Expanding/New construction Currently in production Map as of May 2008, data as of May operating Data from Renewable Fuels Association 11 under construction

7 US Ethanol Production Est. 12 billion gal in 2010; we have 14 billion gal capacity 12 billion gal = 4.3 billion bu 4.3 billion bu out of a 13 billion bu harvest = 33% of crop

8 Corn Utilization 40% of Iowa corn converted to ethanol

9 Provisions of the 2007 Energy Independence & Security Act RFS2 RFS1

10 Corn Ethanol Profitability Data provided by C. Hart, CARD, ISU

11 Biofuels Have Endured Many Charges Negative energy balance Little impact on fuel consumption Not enough corn and soybeans Corn and soybean prices are rising Food vs fuel, we are starving the world Ethanol uses too much water Rain forests are being destroyed New land brought into production exacerbates carbon emissions Depleting CRP and wildlife habitat Ethanol is unsustainable

12 10 Key Messages Message 1 Science and engineering will make biofuels more cost effective.

13 Ener rgy Rat tio Ethanol has a positive (30%) renewable fuel-to-fossil f energy gain But we can do better! Shapouri et al. Kim & Dale Graboski Agri Canada Lorenz & Morris Marland & Turnhollow Wang et al. Average of unrelated studies = 1.3 Shapouri et al. Weinblatt et al. Ho Keeney & DeLuca Pimentel Pimentel Chambers et al. NR Canada Shapouri et al. Kim & Dale Wang Delucchi Pimentel Pimentel & Patzek Patzek Year of Publication Adapted from Wang (2005)

14 Energy Efficiency of Oil Refining and Electric Power Gasoline 84% Energy value solid < gas < liquid < electricity Early refining 20% Modern power plant 33% Coal $1/10 6 BTU Natural gas $12/10 6 BTU Gasoline $23/10 6 BTU Electricity $2,700/10 6 BTU Not all BTUs are equal! Adapted from: RBAEF Project (Dartmouth) and R. Anex (ISU)

15 Dry-Grind Ethanol Yields (industry average) Source: R. Wisner, Iowa State University

16 Many Opportunities to Advance Grain-based Ethanol New hybrids (more yield, easier processing, better co-products) Debran (ethanol) and degerm (oil, pharmaceuticals), better co-product for poultry and swine; CO 2 screw pressing; corn germ protein food ingredients Eliminate by using raw starch (ultrasonics, new hybrids, ozonation) New enzymes (more complete hydrolysis) No-distillation fermentation De-emulsification, 3-phase centrifugation (oil) Fungal fermentation (feed, water recycle) CO 2 screw pressing Zein extraction Biocomposites Expanding and extraction (biodiesel, biolubricants, neutraceuticals)

17 Message 2 U.S. food has been and still is inexpensive. It is not about food vs fuel.

18 Expenditures of Disposable Income for Food Food 23.5% Food 9.8% All other All other 77.5% 91.2%

19 US Spending on Food vs. Gasoline Source: Newsweek, July 21, 2008

20 Ethanol Effect on Gasoline Prices Source Cost Savings from Ethanol USDA/DoE cents per gallon CARD cents Iowa State per gallon University i Merrill Lynch 50 cents per gallon

21 Food and Fuel not Food vs Fuel Gasoline savings per household due to Fuel ethanol (29 to 40 /gal): $210 to $526 Food Added cost to food due to impact of ethanol on food inflation: $6 to $15 Net impact of ethanol on household spending: $204 to $511 Source: USDA and ISU statistics; June 2008.

22 Message 3 Farmers deserve a larger share of food and fuel dollars.

23 Cost of Corn in Corn Flakes Corn represents 13 ofa $3.25 box of corn flakes when corn costs $7.00/bu Probably less than energy costs Source: ISU Extension