What are the environmental implications of increased biofuel use in the U.S., and how

can we model them?

Bruce A. McCarl

Regents Professor of Agricultural Economics

Texas A&M University

Part of a Panel Presented at

Forestry and Agriculture Greenhouse Gas Modeling Forum # 4:

Modeling Ag-Forest Offsets and Biofuels in U.S. and Canadian Regional and National Mitigation

March 6-8, 2007 – Shepherdstown, West Virginia, NCTC

CollaboratorsDarius Adams, Oregon State Ralph Alig, USDA Forest ServiceGerald Cornforth, TAMU Greg Latta, Oregon StateBrian Murray, RTI Dhazn Gillig, TAMUChi-Chung Chen, TAMU, NTU

Mahmood El-Halwagi, TAMU Uwe Schneider, University of Hamburg

Ben DeAngelo, EPA Ken Andrasko, EPASteve Rose, EPA Francisco Delachesnaye, EPA Ron Sands, PNNL, Maryland Heng-Chi Lee, TaiwanThien Muang, TAMU Kenneth Szulczyk, TAMU Michael Shelby, EPA Sharyn Lie, EPA

Sources of SupportUSDA DOE USEPACSiTE

Aspects of the question

• Biofuels and GHGs

• Biofuels and energy

• Biofuels and the air

• Biofuels and the water

• Biofuels and the land

• Biofuels and welfare

Again an Aside

From a GHG perspective

Biofuels ≠ Ethanol

Particularly corn or sugar ethanol

GHG offset = a1 * crop ethanol

+ a2 * cell ethanol

+ a3 * biodiesel

+ a4 * bio fueled electricity

Offset Rates - Lifecycle Analysis

Ethanol offsets are in comparison to gasoline

Power plants offsets are in comparison to coal.Opportunities have different potentials

Net Carbon Emission Reduction (%)Electricity offsets

higher when cofired due to Efficiency and less hauling

Ethanol Electricity Biodiesel Bio feedstock Corn 43 11 Soybeans 96 Sugarcane 28 Switchgrass 81 87 Softwood Log Residue 68 91 Bagasse 86 95 Corn Residue 84 91 Softwood Mill Residue 76 95 Manure 91

Biofuels and energy

Replaces Coal, and Petroleum

Not a perfect substituteEthanol 1.6 gallons to 1 on btu basisChemical properties not the same

Nott all are created equal

Requires energy to make energy

Better as we get into tar sands and oil shales

Hossein has more

Biofuels and the Air Biofuels do not contain very much

Mercury (1/100 of coal)SulfurNitrogen (1/10 of coal)But finings are a wash on NOX

Could provide ash to cement

Source Qin, X., T. Mohan, M.M. El-Halwagi, G.C. Cornforth, and B.A. McCarl, "Switchgrass as an Alternate Feedstock for Power Generation: An Environmental, Energy, and Economic Life-Cycle Analysis," Clean Technologies and Environmental Policy, forthcoming, 2007.

If allows more coal fired power because provides room under cap could increase

Sulfur – acid rainMercury – fishOzone – wash?Carbon monoxide (CO) – wash?Volatile organic compounds (VOCs) – wash?Particulate matter (PM), – wash?Ground-level ozone (O3) – wash?Human health?

Source Elbakidze, L., and B.A. McCarl, "Sequestration Offsets versus Direct Emission Reductions: Consideration of Environmental Co-effects," Ecological Economics, Volume 60, 564-571, 2007.

Biofuels and the Water

Multi-environmental Impacts

40

50

60

70

80

90

100

0 50 100 150 200 250 300

Pol

luti

on (

%/a

cre)

Carbon price ($/tce)

Nitrogen Percolation

Nitrogen Subsurface Flow

Soil erosion

Phosphorus loss through sediment

Change in WQIfrom Baseline

-40 to -101 to 56 to 100

SourcePattanayak, S.K., A.J. Sommer, B.C. Murray, T. Bondelid, B.A. McCarl, D. Gillig, and B. de Angelo, "Water Quality Co-Benefits of Greenhouse Gas Mitigation Incentives in U. S. Agriculture," Forestry and Agriculture Greenhouse Gas Modeling Forum, Shepherdstown, WV, October, 2002.Pattanayak, S.K., B.A. McCarl, A.J. Sommer, B.C. Murray, T. Bondelid, D. Gillig, and B. de Angelo, "Water Quality Co-effects of Greenhouse Gas Mitigation in US Agriculture," Climatic Change, 71, 341-372, 2005.

Biofuels and the Water

Biofuels and land

Pressures for more land

Deforestation

CRP

Potholes

Fencerow to fencerow

Will farm program be effective -- Conservation compliance

Biofuels and the Markets

Ag-Sector Welfare

-100

-50

0

50

100

150

0 50 100 150 200 250 300

Wel

fare

ch

ange

s (b

ill $

)

Carbon price ($/tce)

U.S. Producers (Net)

U.S. Consumers

Foreign Countries

Dead Weight Loss

Gain here but lose in energy sector

Probably should ignore for now

For more information

http://agecon2.tamu.edu/people/faculty/mccarl-bruce/biomass.html