Biofuels and Land Use Changes: Recent Reports Fundamentally Flawed

Recent reports have attempted to determine the environmental consequences of land use changes around the world. In doing so, several have chosen to single out biofuels as contributors to a “carbon debt”. These analyses are fundamentally flawed because:

-- The reports attribute “secondary land use impacts” to biofuels that are not supportable;
-- The reports fail to account for ongoing improvements in agricultural yields and technology improvements in biofuel production; and
-- The reports fail to account for upstream environmental impacts of oil extraction.

The current first-generation biofuels (corn-based ethanol and soy-based biodiesel) are not perfect and alone will not solve all of our problems, but what is clear is that current and future use of renewable fuels reduce carbon compared to conventional gasoline. In addition, the environmental performance of biofuels continues to improve and the next generation of biofuels based on agriculture and other wastes will provide even further CO2 reductions.  Pacific Ethanol is the leading producer and marketer of low carbon fuel in the Western United States and a leader in the development of cellulosic ethanol and other next generation fuels.

“Secondary Land Use Impacts”—A Flawed Concept
The reports assert that increasing production of biofuels in the US is driving destruction of ecosystems in South America and Asia for food production and attributes a carbon debt to biofuels from the clearcutting of rainforests and cultivation of native ecosystems. This assertion is based on assumptions and models that are not and cannot be verified. This “Secondary Land Use Impacts” assumption counters all current, verified analyses showing substantial greenhouse gas emission reductions for biofuels.

Why should US-based corn ethanol, other crop-based biofuels, or advanced cellulosic fuels take a carbon hit for international land use changes for food or housing or other non-fuel related production? By that logic:

-- Any US farmland not growing food crops is creating a carbon debt by increasing demand for international food production—What are the “secondary land use impacts” of US grass seed farmers? Or tobacco farmers? Or nursery owners? Or cotton, tomatoes grapes and a myriad of other non-food related agricultural acreage in the US?
-- Every new subdivision and greenfield commercial, industrial or residential development creates a carbon debt by taking potential food-producing land out of production and shifting that demand to sensitive, international native ecosystems; and
-- Any effort in the US to protect ancient forests or native ecosystems creates a carbon debt by increasing demand for international sources of wood products.

Any analysis that shifts away from a life cycle analysis of the carbon potential for a single product or fuel and attempts to distribute carbon potential to “secondary” or “tertiary” impacts will create a dead-end, through-the-looking-glass scenario that is inaccurate and unworkable.

The real implication of accepting “secondary land use impacts” is an on-going dependence on CO2 intensive, polluting, imported fossil fuels. Inclusion of secondary impacts is the wrong approach—each product should stand on its own.

It’s Not Acre for Acre—Productivity Gains Means We Get More From Less
The analyses of land use impacts assume that for every acre of land dedicated to renewable energy feedstocks, another acre of land must be put into production elsewhere in the world. This assumption is flawed for several reasons:

-- It fails to account for advances in seed and processing technology that are providing greater yields for each acre of feedstock.
Corn acreage in the US peaked in 1917 with 116 million acres planted, compared to 93 million acres in 2007. During that period yields have increased by more than 1 bushel/acre/year, from 29 bushels/acre to 200 bushels/acre. This year the US will harvest more than 10 billion bushels of corn, and exports are rising, so certainly US corn ethanol production is not causing a need for increased grain production in the world.

-- It ignores the value of the feed co-products that are produced at today’s biorefineries.
The food value of corn is not lost in ethanol production—distillers grain is a high protein, high nutrient co-product that is sold back into the food market.

-- It inappropriately assigns all of the impact to growth in renewable fuels, ignoring the effects of a growing world economy, increased demand for food, and urban sprawl.

The Environmental Impacts of Fossil Fuels are Increasing
The reports fail to account for the fact that every gallon of biofuel produced today requires less land, requires less water and is less energy intensive than a decade ago, while the opposite is true for oil production. Every new gallon of oil produced is more energy intensive and requires much more water than before.

The “easy” sources of oil have been found and are being depleted. What is left are more remote, costlier and more environmentally damaging nontraditional sources like Canadian tar sands or Rocky Mountain oil shale. By failing to capitalize on the opportunity renewable fuels offer to begin breaking our adherence to the oil standard, the world would be forced to develop these nontraditional sources of oil that carry significant environmental price tags.

Even traditional sources of oil have steep environmental costs that are not accounted for in the land use reports. Where is the accounting for oil drilling in the Amazon? Oil spills in San Francisco Bay? Or asthma deaths from air pollution?

To Hear What Others Have to Say, Visit These Links:

Renewable Fuels Association

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Pacific Ethanol is the largest West Coast-based marketer and producer of ethanol.  Pacific Ethanol has ethanol plants in Madera, California; Boardman, Oregon; and Burley, Idaho and has an additional plant under construction in Stockton, California.  Pacific Ethanol also owns a 42% interest in Front Range Energy, LLC which owns an ethanol plant in Windsor, Colorado. Central to Pacific Ethanol’s growth strategy is its destination business model, whereby each respective ethanol plant achieves lower process and transportation costs by servicing local markets for both fuel and feed.  Pacific Ethanol’s goal is to achieve 220 million gallons per year of ethanol production capacity in 2008 and to increase total production capacity to 420 million gallons per year in 2010.  In addition, Pacific Ethanol is working to identify and develop other renewable fuel technologies, such as cellulose-based ethanol production and bio-diesel.

With the exception of historical information, the matters discussed in this press release including, without limitation, Pacific Ethanol’s belief that it will complete construction of the ethanol plant in Stockton within the next 14 months, Pacific Ethanol’s belief that the area’s concentration of cattle is sufficient to consume the expected wet distillers grain output from the plant to be located in Stockton and that the plant’s location will provide affordable access to fuel markets in California, and that Pacific Ethanol will have in excess of 220 million gallons of annual production capacity by mid-2008, are forward-looking statements that involve a number of risks and uncertainties. The actual future results of Pacific Ethanol could differ from those statements. Factors that could cause or contribute to such differences include, but are not limited to, the ability of Pacific Ethanol to conform to the funding and other requirements of its recently completing debt financing; the ability of Pacific Ethanol to successfully and timely complete construction of its ethanol plants in Boardman, Oregon, Burley, Idaho, Calipatria and Stockton, California, the ability of Pacific Ethanol to timely complete, in a cost effective manner, its ethanol plant build-out program and to successfully capitalize on its internal growth initiatives; the ability of Pacific Ethanol to operate its plants at their planned production capacities; the price of ethanol relative to the price of gasoline; and those factors contained in the “Risk Factors” section of Pacific Ethanol’s Form 10-K filed with the Securities and Exchange Commission on March 12, 2007.