brian jennings on ethanol
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at Plain Green Conference 2008.TRANSCRIPT
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Ethanol and Sustainability
Plain Green ConferenceSioux Falls, SD
Brian Jennings, Executive Vice PresidentAmerican Coalition for Ethanol (ACE)
September 26, 2008
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About ACE • Public Policy
• Market Development
• Public Relations & Communications
• Grassroots Member Empowerment
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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.
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Clean Air Act
RFS &MTBE
Public policies and market forces help drive demand for ethanol.
Clean Air Act Amdts
2005 Energy BillRFS
MTBE
2007 Energy Bill$100 + oil
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About 60% of RFS fromadvanced biofuels.
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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.
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Timely Challenges
• Volatility
• PR issues; “food v. fuel,” land use changes, “good v. bad ethanol”
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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)
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Price Check: Oil vs. Corn1949 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
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Record corn exports in 07/08
90% of U.S. corn exports used by other countries to feed livestock.
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Distillers grains from ethanol concentrate nutrients for valuable livestock feed
Source: 2008 Feedstuffs Reference Issue; Ingredient Analysis Table. RFA
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Year Harvested Acres
Average Yield
Production
1944 85 million 33 bu /acre
2.8 B bu
2007 85 million 151 bu /acre
13.1 B bu
Corn: 1944 vs. 2007
Nearly 400% increase in production without increasing acres in last 60 years.
Source: NCGA
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More corn per acre…
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…and doing so with less fertilizer.
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0%
10%
20%
30%
40%
1990 1992 1994 1996 1998 2000 2002 2004 2006
31.50%
26.50%25.30%24.60%21.60%20.90%21.20%
15.20%
7.40%
NO-TILL ACRES AS % OF REPORTING ACRES
% o
f Rep
orte
d A
cres
Conservation practices on the rise
Source: Conservation Technology Information Center
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U.S. cropland erosion
Source: NRCS
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Ethanol’s Decidedly Positive Energy Balance
Btu of ethanol minus fossil energy used to make the ethanol
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Ethanol’s Decidedly Positive Energy Balance
Btu of ethanol minus fossil energy used to make the ethanol
Wan
g
GR
EET w
/Pi
men
tel
Assu
mpt
ions
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Climate Change Legislation to reduce
Source: Global Insight
Energy includes transportation, coal (electricity), and othermanufacturing.
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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
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U.S. ethanol production hasgrown since 2004….
and deforestationin Brazil has declinedduring the same time
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Ethanol replaces the incremental gallon of fuel, increasingly from environmentally damaging sources…
Research indicates that tar sands oil generates 150 to 300% more GHGsthan corn ethanol.
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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.
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20%Reduction 28%
Reduction
52%Reduction
86%Reduction
Gasoline
NaturalGas
BiomassCurrentAverage
CellulosicEthanolCorn Ethanol
BiomassPetroleum
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.
Greenhouse gas reductionassumptions from DoE
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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.
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www.ethanol.org