Brian Jennings on Ethanol
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  • 1. Ethanol and Sustainability Plain Green Conference Sioux Falls, SD Brian Jennings, Executive Vice President American Coalition for Ethanol (ACE) September 26, 2008
  • 2. About ACE • Public Policy • Market Development • Public Relations & Communications • Grassroots Member Empowerment
  • 3. Outline • General overview of ethanol production and use. • Producing and using ethanol in a way that does not compromise the environment or our food supply.
  • 4. 2007 Energy Bill $100 + oil 2005 Energy Bill RFS & MTBERFS MTBE Clean Air Act Clean Air Act Amdts Public policies and market forces help drive demand for ethanol.
  • 5. About 60% of RFS from advanced biofuels.
  • 6. Use of Fuel Ethanol • E10 – path of least resistance. • E85 – 200 million cars on road, only 6 million FFVs. 1600 E85 pumps, around 170,000 stations. Once we supply the E10 market…..E85 and… • Other blends - E15, E20, E30, etc? Most pressing issue facing the ethanol industry today, beyond E10.
  • 7. Timely Challenges • Volatility • PR issues; “food v. fuel,” land use changes, “good v. bad ethanol”
  • 8. Factors impacting food prices  Oil and energy prices – primary culprit - 80 cents of retail food dollar.  Unprecedented demand (growing dietary needs of China, India)  Crop failures & poor crops (drought)  Speculative investing in commodities  Weak U.S. dollar  Export restrictions (Argentina, Russia, etc)
  • 9. Price Check: Oil vs. Corn 1949 2008 % Increase Oil $2.54/barrel $125/barrel 4821% Corn $1.24/bu $6.13/bu 394% • Oil is in everything. • Average food item travels 1500 miles before reaching grocery store. Sources: National Farmers Union, USDA
  • 10. Record corn exports in 07/08 90% of U.S. corn exports used by other countries to feed livestock.
  • 11. Distillers grains from ethanol concentrate nutrients for valuable livestock feed Source: 2008 Feedstuffs Reference Issue; Ingredient Analysis Table. RFA
  • 12. Corn: 1944 vs. 2007 Year Harvested Average Production Acres Yield 1944 85 million 33 bu / 2.8 B bu acre 2007 85 million 151 bu / 13.1 B bu acre Nearly 400% increase in production without increasing acres in last 60 years. Source: NCGA
  • 13. More corn per acre…
  • 14. …and doing so with less fertilizer.
  • 15. Conservation practices on the rise NO-TILL ACRES AS % OF REPORTING ACRES 40% 31.50% % of Reported Acres 30% 26.50% 24.60% 25.30% 21.20% 20.90% 21.60% 20% 15.20% 10% 7.40% 0% 1990 1992 1994 1996 1998 2000 2002 2004 2006 Source: Conservation Technology Information Center
  • 16. U.S. cropland erosion Source: NRCS
  • 17. Ethanol’s Decidedly Positive Energy Balance Btu of ethanol minus fossil energy used to make the ethanol
  • 18. Ethanol’s Decidedly Positive Energy Balance g an W ons / ET w mpti ntel GRE Pime Assu Btu of ethanol minus fossil energy used to make the ethanol
  • 19. Climate Change Legislation to reduce Energy includes transportation, coal (electricity), and other manufacturing. Source: Global Insight
  • 20. Contributing to Global Warming? • Accusing ethanol of Brazil deforestation and global warming. • Amazon clearing decreased 67% since 2004, while U.S. ethanol production doubled in the same time. • In 2007, U.S. ethanol production reached all-time high while Amazon clearing fell to 20-year low. Causes of Amazon deforestation*: Brazil cattle/meat industry 60% Subsistence agriculture 30% *Source: Natl Institute of Space Research
  • 21. U.S. ethanol production has grown since 2004…. and deforestation in Brazil has declined during the same time
  • 22. Ethanol replaces the incremental gallon of fuel, increasingly from environmentally damaging sources… Research indicates that tar sands oil generates 150 to 300% more GHGs than corn ethanol.
  • 23. Ethanol Efficiencies • Energy use decreased 21.8% from 2001 to 2006. • 37% of the dried distillers grains with solubles (DDGS) was sold as wet feed which reduces heat demand in the plant between 2001 and 2006. • Water consumption decreased 26.6%. • One bushel of corn yields about 3 gallons of ethanol today. Source: Argonne National Lab, based on RFA survey.
  • 24. 20% Greenhouse gas reduction Reduction 28% Reduction assumptions from DoE 52% Reduction 86% Reduction Gasoline Corn Ethanol Cellulosic Ethanol Petroleum Current Natural Biomass Biomass Average Gas Sources: Wang et al, Environ. Research Letters, May 2007; Wang et al, Life-Cycle Energy Use and GHG Implications of Brazilian Sugarcane Ethanol Simulated with GREET Model, Dec. 2007.
  • 25. In conclusion… • It is inescapable; our status quo reliance on fossil & foreign fuel is not a viable option. • Ethanol is part of the solution. Homegrown. Better for Environment. Ready Now. • No silver bullets.
  • 26. www.ethanol.org