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Global Perspectives on Biofuels- What's the Potential/ Future
By the Alberta Agriculture and Rural Development. This document is part of the Capturing Feed Grain & Forage Opportunities 2007 Proceedings - "Farming for Feed, Forage and Fuel."
Key Points
- Global biofuel production are expected to increase
- Global crude oil inventory is low and crude oil spare production capacity is about 2 million barrels per day that is about 2 percent of total consumption. This means world crude oil prices will remain high.
- Crude oil demand in China and India are expected to grow at the high rate of recent past.
- Higher prices of crude oil and refined petroleum products will escalate global production of biofuels
- Expanding global production of biofuels made from food crops will increase prices of food in the world markets
- The best option to expand global biofuel, is to increase in production of non-food feedstocks such as agricultural and forest residues, sorted MSW, dedicated energy crops produced in marginal land, etc.
- In the long run, through advanced technologies, cellulosic materials produced in non cropland areas can be converted to biofuels without any impact on food prices.
Global production of ethanol and biodiesel has increased significantly in recent years. Global production of ethanol increased from 56 billion liters (BL) in 2006 to 66 BL in 2007 and is forecasted to surpass 100 BL by 2010. The United States and Brazil are set to remain the engine of global ethanol production growth. Other key producing countries are the European Union (EU), China, India, Canada, Russia, South Africa, Thailand, and Colombia. However, there are many small countries producing beverage and industrial alcohol.
The current global crude oil production is about 85 million barrels per day and is forecasted to increase 1.5 to 2 percent per year through 2030 (EIA). Global crude oil inventory is low and oil demand is growing, in particular in emerging countries such as China and India. In addition, because of the low spare capacity crude oil, prices are expected to remain high in the future.
Higher world crude oil prices and refined petroleum products provide incentives for both developed and developing countries to seek to increase production of ethanol and other biofuels. Sugar, molasses, and grains are used as feedstock for the production of ethanol, and that in addition to higher food and feed demand, have led to a significant increase in the global prices of grain, vegetable oils, and animal fats. The continuation of the current price trends, without any technology breakthrough in celluosic base ethanol, can lead to large conversion of land to agricultural production to meet the needs.
Scientists in the United States, the European Union, and Brazil are doing research to convert cellulosic materials such as residues from agriculture and forestry, manure, organic portions of municipal solid waste, mill residues, black liqueur, sugar cane and cotton trash to liquid fuels. Thermo-chemical and biochemical processes will convert the cellulosic materials to a variety of fuels such as ethanol, bio-buthnol, methanol, mixed alcohol, synthetic diesel, and gasoline. There are already a few cellulosic ethanol pilots’ plants around world but no commercial plant operating anywhere in the world. The goal of the U.S. government (Department of Energy and the Department of Agriculture) is to promote commercialization of the production of cellulosic based ethanol in the United States.
It is an accepted fact that there is a limit in the use of food crops for biofuel production. Global population is increasing and that combined with income growth continue to increase global food and feed demand. Growth and diversification of diets in emerging markets such as China and India means a surge in food demand that has not been experienced before. The soaring food prices also could create significant financial difficulties for the lower income developing countries to meet their basic food needs.
There is also limitation in expanding agricultural land to increase production. With the exception of some excess cropland in the US, EU, Australia, and Brazil, almost all of the croplands available for the production of food are planted each year for food, feed, and fiber. There is also growing trends in food and fuel import dependency among developing countries (many in Africa, Latin America, and East Asia). For these countries there is no clear choice but reports indicate that many are trying to convert some of their cropland for the production of biofuels.
In the United State, the largest producers of ethanol, high demand for corn led to increased in the prices of corn and other feed grains by about 40 percent this year. The high corn demand meant that more than 13 million acres of cropland were converted to corn from cotton and soybeans. Currently the limit in production of corn ethanol is approximately 15 billion gallons per year but the goal of the government is to increase production of renewable and alternative fuels to about 35 and 36 billion gallons by 2017 and 2022 respectively. This means without any change in the current cropland, the higher production of biomass feedstock could lead to upward trend in food prices in the next 10 to 15 years. Factors that can alter this scenario are 1) producing biomass material in Conservation Reserve Program (CRP) areas, and 2) introduction of new technology and/or innovation leading to higher crop yields leading to much higher production food, feed and biomass feedstock.
Some biofuel advocates are considering the use of cropland pasture for production of biomass feedstock but the problem is that cropland pasture is used for the grazing of livestock and the production of hay for use during the winter season. Again, advancement in technology could lead to improvement in the yield in cropland pasture and/or some of the existing cropland could be used to produce more nutritionally efficient feed such as alfalfa.
Beyond the use of food crops for biofuel production, the potential to increase biofuels dramatically changes in the case of cellulosic materials that are abundant supplies globally. These materials include agricultural and forestry residues, sorted municipal solid waste, byproducts of food and forest processing plans, fast growing trees and grasses, as well as the development of new crops that could be planted in non-cropland areas. Scientists around the world are working to increase the existing crop yield per acre, create new varieties of crops with high tolerance to draught and salt. Genetically modified energy crops could be produced, which may be grown in non-cropland areas without increasing the effects on food production.
Conclusion
Global biofuel production is expected to increase over time. Higher prices of crude oil and gasoline will encourage many countries to convert cropland areas to biofuel production. Globally, the quality and quantities of food diet will be affected by increase in biofuel production. One way to avert or minimize the impact to convert non food feedstocks such agriculture and crop residues, MSW, Manure, and dedicated energy crops grown in non cropland area to biofuels. Scientists in the US, EU, and Brazil are working to convert cellulosic materials to biofuels. In addition, advanced technology in energy crop production and conversion also could increase global production of biofuels without any impact on food prices and quality of diet.
May 2008
