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    The 4th Annual Brussels Climate Change Conference is announced for 26 - 27 February 2008. This joint CEPS/Epsilon conference will explore the key issues for a post-Kyoto agreement on climate change. The conference focuses on EU and global issues relating to global warming, and in particular looks at the following issues: - Post-2012 after Bali and before the Hokkaido G8 summit; Progress of EU integrated energy and climate package, burden-sharing renewables and technology; EU Emissions Trading Review with a focus on investment; Transport Climatepolicy.eu - January 28, 2007.

    Japan's Marubeni Corp. plans to begin importing a bioethanol compound from Brazil for use in biogasoline sold by petroleum wholesalers in Japan. The trading firm will import ETBE, which is synthesized from petroleum products and ethanol derived from sugar cane. The compound will be purchased from Brazilian petrochemical company Companhia Petroquimica do Sul and in February, Marubeni will supply 6,500 kilolitres of the ETBE, worth around US$7 million, to a biogasoline group made up of petroleum wholesalers. Wholesalers have been introducing biofuels since last April by mixing 7 per cent ETBE into gasoline. Plans call for 840 million liters of ETBE to be procured annually from domestic and foreign suppliers by 2010. Trading Markets - January 24, 2007.

    Toyota Tsusho Corp., Ohta Oil Mill Co. and Toyota Chemical Engineering Co., say it and two other firms have jointly developed a technology to produce biodiesel fuel at lower cost. Biodiesel is made by blending methanol into plant-derived oil. The new technology requires smaller amounts of methanol and alkali catalysts than conventional technologies. In addition, the new technology makes water removal facilities unnecessary. JCN Network - January 22, 2007.

    Finland's Metso Paper and SWISS COMBI - W. Kunz dryTec A.G. have entered a licence agreement for the SWISS COMBI belt dryer KUVO, which allows biomass to be dried in a low temperature environment and at high capacity, both for pulp & paper and bioenergy applications. Kauppalehti - January 22, 2007.

    Record warm summers cause extreme ice melt in Greenland: an international team of scientists, led by Dr Edward Hanna at the University of Sheffield, has found that recent warm summers have caused the most extreme Greenland ice melting in 50 years. The new research provides further evidence of a key impact of global warming and helps scientists place recent satellite observations of Greenland´s shrinking ice mass in a longer-term climatic context. Findings are published in the 15 January 2008 issue of Journal of Climate. University of Sheffield - January 15, 2007.

    Japan's Tsukishima Kikai Co. and Marubeni Corp. have together clinched an order from Oenon Holdings Inc. for a plant that will make bioethanol from rice. The Oenon group will invest around 4.4 billion yen (US$40.17 million) in the project, half of which will be covered by a subsidy from the Ministry of Agriculture, Forestry and Fisheries. The plant will initially produce bioethanol from imported rice, with plans to use Hokkaido-grown rice in the future. It will produce 5 million liters per year starting in 2009, increasing output to 15m liters in 2011. The facility will be able to produce as much as 50,000 liters of bioethanol from 125 tons of rice each day. Trading Markets - January 11, 2007.

    PetroSun, Inc. announced today that its subsidiary, PetroSun BioFuels Refining, has entered into a JV to construct and operate a biodiesel refinery near Coolidge, Arizona. The feedstock for the refinery will be algal oil produced by PetroSun BioFuels at algae farms to be located in Arizona. The refinery will have a capacity of thirty million gallons and will produce 100% renewable biodiesel. PetroSun BioFuels will process the residual algae biomass into ethanol. MarketWire - January 10, 2007.

    BlueFire Ethanol Fuels Inc, which develops and operates carbohydrate-based transportation fuel production facilities, has secured capital liquidity for corporate overhead and continued project development in the value of US$15 million with Quercus, an environmentally focused trust. BlueFire Ethanol Fuels - January 09, 2007.

    Some $170 billion in new technology development projects, infrastructure equipment and construction, and biofuel refineries will result from the ethanol production standards contained the new U.S. Energy Bill, says BIO, the global Biotechnology Industry Organization. According to Brent Erickson, BIO's executive vice president "Such a new energy infrastructure has not occurred in more than 100 years. We are at the point where we were in the 1850s when kerosene was first distilled and began to replace whale oil. This technology will be coming so fast that what we say today won't be true in two years." Chemical & Engineering News - January 07, 2007.

    Scottish and Southern Energy plc, the UK's second largest power company, has completed the acquisition of Slough Heat and Power Ltd from SEGRO plc for a total cash consideration of £49.25m. The 101MW CHP plant is the UK’s largest dedicated biomass energy facility fueled by wood chips, biomass and waste paper. Part of the plant is contracted under the Non Fossil Fuel Obligation and part of it produces over 200GWH of output qualifying for Renewable Obligation Certificates (ROCs), which is equivalent to around 90MW of wind generation. Scottish & Southern Energy - January 2, 2007.

    PetroChina Co Ltd, the country's largest oil and gas producer, plans to invest 800 million yuan to build an ethanol plant in Nanchong, in the southwestern province of Sichuan, its parent China National Petroleum Corp said. The ethanol plant has a designed annual capacity of 100,000 tons. ABCMoneyNews - December 21, 2007.

    Mexico passed legislation to promote biofuels last week, offering unspecified support to farmers that grow crops for the production of any renewable fuel. Agriculture Minister Alberto Cardenas said Mexico could expand biodiesel faster than ethanol. More soon. Reuters - December 20, 2007.

    Oxford Catalysts has placed an order worth approximately €700,000 (US$1 million) with the German company Amtec for the purchase of two Spider16 high throughput screening reactors. The first will be used to speed up the development of catalysts for hydrodesulphurisation (HDS). The second will be used to further the development of catalysts for use in gas to liquid (GTL) and Fischer-Tropsch processes which can be applied to next generation biofuels. AlphaGalileo - December 18, 2007.

    According to the Instituto Brasileiro de Geografia e Estatística (IBGE), Brazil's production of sugarcane will increase from 514,1 million tonnes this season, to a record 561,8 million tonnes in the 2008/09 cyclus - an increase of 9.3%. New numbers are also out for the 2007 harvest in Brazil's main sugarcane growing region, the Central-South: a record 425 million tonnes compared to 372,7 million tonnes in 2006, or a 14% increase. The estimate was provided by Unica – the União da Indústria de Cana-de-Açúcar. Jornal Cana - December 16, 2007.

    The University of East Anglia and the UK Met Office's Hadley Centre have today released preliminary global temperature figures for 2007, which show the top 11 warmest years all occurring in the last 13 years. The provisional global figure for 2007 using data from January to November, currently places the year as the seventh warmest on records dating back to 1850. The announcement comes as the Secretary-General of the World Meteorological Organization (WMO), Michel Jarraud, speaks at the Conference of the Parties (COP) in Bali. Eurekalert - December 13, 2007.

    The Royal Society of Chemistry has announced it will launch a new journal in summer 2008, Energy & Environmental Science, which will distinctly address both energy and environmental issues. In recognition of the importance of research in this subject, and the need for knowledge transfer between scientists throughout the world, from launch the RSC will make issues of Energy & Environmental Science available free of charge to readers via its website, for the first 18 months of publication. This journal will highlight the important role that the chemical sciences have in solving the energy problems we are facing today. It will link all aspects of energy and the environment by publishing research relating to energy conversion and storage, alternative fuel technologies, and environmental science. AlphaGalileo - December 10, 2007.

    Dutch researcher Bas Bougie has developed a laser system to investigate soot development in diesel engines. Small soot particles are not retained by a soot filter but are, however, more harmful than larger soot particles. Therefore, soot development needs to be tackled at the source. Laser Induced Incandescence is a technique that reveals exactly where soot is generated and can be used by project partners to develop cleaner diesel engines. Terry Meyer, an Iowa State University assistant professor of mechanical engineering, is using similar laser technology to develop advanced sensors capable of screening the combustion behavior and soot characteristics specifically of biofuels. Eurekalert - December 7, 2007.

    Lithuania's first dedicated biofuel terminal has started operating in Klaipeda port. At the end of November 2007, the stevedoring company Vakaru krova (VK) started activities to manage transshipments. The infrastructure of the biodiesel complex allows for storage of up to 4000 cubic meters of products. During the first year, the terminal plans to transship about 70.000 tonnes of methyl ether, after that the capacities of the terminal would be increased. Investments to the project totaled €2.3 million. Agrimarket - December 5, 2007.

    New Holland supports the use of B100 biodiesel in all equipment with New Holland-manufactured diesel engines, including electronic injection engines with common rail technology. Overall, nearly 80 percent of the tractor and equipment manufacturer's New Holland-branded products with diesel engines are now available to operate on B100 biodiesel. Tractor and equipment maker John Deere meanwhile clarified its position for customers that want to use biodiesel blends up to B20. Grainnet - December 5, 2007.

    According to Wetlands International, an NGO, the Kyoto Protocol as it currently stands does not take into account possible emissions from palm oil grown on a particular type of land found in Indonesia and Malaysia, namely peatlands. Mongabay - December 5, 2007.

    Malaysia's oil & gas giant Petronas considers entering the biofuels sector. Zamri Jusoh, senior manager of Petronas' petroleum development management unit told reporters "of course our focus is on oil and gas, but I think as we move into the future we cannot ignore the importance of biofuels." AFP - December 5, 2007.

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Friday, February 01, 2008

A380 test flight on GTL fuel kicks off Airbus alternative fuel program - includes biofuels

EADS today announced that an Airbus A380 aircraft has successfully completed the world’s first ever flight by a commercial aircraft using a liquid fuel processed from gas (Gas-to-Liquids - GTL). The flight from Filton, UK to Toulouse, France, lasted three hours. This test in the first stage of a programme to evaluate the environmental impact of alternative fuels in the airline market, which includes research into Biomass-to-Liquids fuels (BTL - synthetic biofuels).

The A380, today’s most fuel efficient airliner, is powered by Rolls Royce Trent 900 engines. Shell International Petroleum provided the Shell GTL Jet Fuel. The tests are running in parallel to the agreement signed in November 2007 with the Qatar GTL consortium partners and the results will be shared.

The A380 was chosen because the aircraft is already the environmental benchmark in air travel. It has four engines including segregated fuel tanks making it ideal for engine shut down and re-light tests under standard evaluation conditions. During the flight, engine number one was fed with a blend of GTL and jet fuel whilst the remaining three were fed with standard jet fuel.

This test flight initiates Airbus’ alternatives fuels research programme. GTL could be available at certain locations to make it a practical and viable drop-in alternative fuel for commercial aviation in the short term. GTL has attractive characteristics for local air quality, as well as some benefits in terms of aircraft fuel burn relative to existing jet fuel. For instance, it is virtually free of sulphur. Synthetic fuel can be made from a range of hydrocarbon source material including natural gas or biomass, via the Fischer-Tropsch process.

Testing GTL today will support future second generation biofuels, but which are not presently available in sufficient commercial quantities. Airbus says it will study viable second generation biofuels when they become available:
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Fuel and environment are key challenges aviation is facing and for which technology and international research collaboration open up new horizons. Our alternative fuels roadmap requires innovation, diversity of ideas and options that need to be explored. This takes bold cross industry and cross border collaboration and that's what we are showing today with our groundbreaking first test flight with alternative fuels. It is part and parcel of Airbus' commitment to providing leadership as an eco-efficient enterprise. - Tom Enders, Airbus President and CEO
Airbus's trial comes at a time when Virgin Atlantic is expected to test the world's first large civilian aircraft on biofuel. It announced the test flight will take place this month. The aircraft will be a Boeing 747. Virgin has not disclosed which biofuel it will be utilizing on that historic occasion.

With Airbus' test flight today and its announcement that it too will research next-generation biofuels, all major aircraft manufacturers (Airbus, Boeing, Embraer and others) now have initiated programs to research renewable biofuels for aviation.

In December, the United States Air Force conducted the first ever transcontinental flight of a large aircraft - a C17 - on a synthetic fuel. The flight followed successful tests of the fuel blend in C-17 engines in October, and was the next step in the Air Force's effort to have its entire C-17 fleet certified to use the mixture. Air Force officials certified B-52 Stratotankers to use the mixture in August, and hope to certify the fuel blend for use in all its aircraft within the next five years (previous post).

EADS: Airbus Completes First Test Flight With Alternative Fuel On Civil Aircraft - February 1, 2008.

EADS: Airbus A380 Commences Alternative Fuel Test Flight Programme - February 1, 2008.

Biopact: USAF C-17 makes first ever transcontinental flight on synthetic fuel blend - December 18, 2007

Biopact: Virgin Atlantic to test biofuel in 747 in early 2008 - October 16, 2007

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British Columbia launches Bioenergy Strategy: electricity self sufficiency with biomass, zero GHG emissions from power, 50% biofuels by 2020

British Columbia's govrnment announced the launch of the province's comprehensive Bioenergy Strategy [*.pdf]. The framework aims to make the Canadian province entirely electricity self-sufficient by 2016 by relying on biomass. The emphasis on bioenergy will also lead to meeting the target of achieving zero new emissions from energy generation projects. Moreover, bioenergy and biofuels are to make up 50 per cent of all renewable fuels in the province by 2020.

The plan covers investments over the coming decennium into the broadest range of bioenergy sectors: bio-electricity, bioproducts, organic waste-to-energy, next-generation liquid biofuels such as cellulosic ethanol and gasification based biofuels, biohydrogen and biogas (timeline, click to enlarge).

According to the government, the Bioenergy Strategy will create new opportunities for rural communities; spur new investment and innovation; help British Columbia reach the goal of achieving full energy security, and help it fight climate change in a drastic way.

The BC Bioenergy Strategy includes:
  • Establishment of $25 million in funding for a provincial Bioenergy Network for greater investment and innovation in B.C. bioenergy projects and technologies
  • A target for B.C biofuel production to meet 50 per cent or more of the province’s renewable fuel requirements by 2020, which supports the reduction of greenhouse gas emissions from transportation
  • The establishment of funding to advance provincial biodiesel production with up to $10 million over three years
  • Development of at least 10 community energy projects that convert local biomass into energy by 2020
  • Issuing a two-part Bioenergy Call for Power – the first part will be issued shortly, the second part by July 1, 2008 – focusing on existing biomass inventory in the forest industry and offering opportunities for smaller energy producers with projects that are immediately viable
  • Establishment one of Canada’s most comprehensive provincial biomass inventories that creates waste to energy opportunities
  • Support for methane capture from the province's largest landfills
  • Incentives to utilize waste wood from phased-out beehive burners to produce clean energy
  • Support for wood gasification research, development and commercialization
The plan further aims to develop the province’s bioenergy resources to enhance both the environmental and economic benefits for its people by collaborating with the Western Climate Initiative and the Pacific NorthWest Economic Region, creating First Nations bioenergy opportunities and providing energy providers with information to develop new opportunities.

The proposed Bioenergy Network will:
  • Support wood gasification research, development and commercialization in collaboration with the University of Northern British Columbia, University of British Columbia, Forest Products Innovation, the National Research Council, the forestry and energy sectors, industry and other partners.
  • Advance biorefining for multiple, value-added product streams, such as biochemicals, in conjunction with bioenergy production in new facilities and/or at existing industrial operations by working with the BC Bioproducts Association, First Nations, agricultural and forest sectors.
  • Encourage the development of pilot and demonstration projects with industries and communities in key biomass resource areas.
  • Support research into socially and environmentally responsible dedicated energy crop production and enhance enzymatic and other biotechnology solutions for biomass-to-energy conversion.
  • Advance the development of biofuels, such as cellulosic ethanol and renewable diesel from algae and other resources, through the Green Energy and Environmentally Friendly Chemical Technologies Project and other initiatives.
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The network will strengthen the development of world-class bioenergy research and technology expertise in British Columbia. This will include the creation of at least one academic leadership chair in bioenergy.
There is an abundance of bioenergy opportunities, such as using biomass created out of the mountain pine beetle outbreak that can stimulate investment and economic diversification while producing clean energy. - Gordon Campbell, British Columbia's Premier

B.C. has half of Canada’s entire biomass electricity-generating capacity. This strategy helps forest-dependent communities and brings opportunity to the agriculture sector as it looks at recovering maximum value from beetle-killed timber, wood wastes, and agricultural residues to generate renewable energy. - Rich Coleman, Forests and Range Minister
Additionally, the bioenergy strategy will help facilitate the closure of beehive burners and divert the waste stream for energy production, increase production and utilization of biofuels including biodiesel and facilitate production of anaerobic digestion bioenergy to address waste anagement
challenges posed by the agricultural industry. The Province will also work with industry to develop new fine particulate standards for industrial boilers to improve air quality.

B.C. leads Canada in energy production from biomass. Over 800 megawatts of biomass electricity capacity is installed in the province, enough to power 640,000 households. Pulp and paper mills meet over a third of their electricity needs through cogeneration of electricity and steam on site. In 2007, the B.C. wood pellet industry produced over 900,000 tonnes of wood pellets, of which 90 per cent was exported for thermal power production overseas.

Encouraging the emerging bioenergy industry and developing new and innovative uses for beetle-wood is part of the provincial Mountain Pine Beetle Action Plan.

British Columbia, Office of the Premier, Ministry of Energy, Mines and Petroleum Resources, Ministry of Forests and Range: New Bioenergy Strategy Advances Innovation - January 31, 2008.

British Columbia Energy Plan: British Columbia Bioenergy Strategy [*.pdf].

British Columbia Energy Plan: Bioenergy Information Guide [*.pdf].

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Welcome to the Anthropocene?

An international team of geologists is proposing that since the Industrial Revolution humankind has so changed the earth that it has brought about an end to one epoch of earth’s history and marked the start of another. They believe that human dominance has so physically altered the earth itself that the Holocene epoch has ended and we have entered a new epoch - the Anthropocene.

In the open access article "Are we now living in the Anthropocene?", published in the journal GSA Today, the scientists examined phenomena such as changes in the patterns of sediment erosion and deposition, major disturbances to the carbon cycle and global temperature, ocean acidification and wholesale changes to the world’s plants and animals.
Human activity has become the number one driver of most of the major changes in Earth's topography and climate. You can’t have 6.5 billion people living on a planet the size of ours and exploiting every possible resource without creating huge changes in the physical, chemical and biological environment which will be reflected dramatically in our geological record of the planet. - Dr Andrew Gale, School of Earth and Environmental Sciences, University of Portsmouth
The Holocene epoch the researchers think is now ending, is a geological period which began approximately 11,550 years ago. It is part of the Neogene and Quaternary periods and can be considered as an interglacial in the current ice age. In 2002, Paul Crutzen, a Nobel Prize–winning chemist, however suggested that we had left the Holocene and had entered a new Epoch — the Anthropocene — because of the global environmental effects of increased human population and economic development.

Members of the Stratigraphy Commission of the Geological Society of London now amplify and extend the discussion of the effects referred to by Crutzen and then apply the same criteria used to set up new epochs to ask whether there really is justification or need for a new term, and if so, where and how its boundary might be placed. In their paper, the scientists present the scholarly groundwork for consideration by the International Commission on Stratigraphy for formal adoption of the Anthropocene as the youngest epoch of, and most recent addition to, the earth's geological timescale.

Human influence altering the Holocene
Prior to the Industrial Revolution, the global human population was some 300 million at A.D. 1000, 500 million at A.D. 1500, and 790 million by A.D. 1750 and exploitation of energy was limited mostly to firewood and muscle power. Early to mid-Holocene increases in atmospheric carbon dioxide ranged from 260 to 280 ppm, a factor in the climatic warmth of this interval, the result of forest clearance by humans. Human activity was not absent in the creation of Holocene strate, but it did not create new, global environmental conditions that could translate into a fundamentally different stratigraphic signal.

In contrast, from the beginning of the Industrial Revolution to the present day, global human population has climbed rapidly from under a billion to its current 6.5 billion (Fig. 1, click to enlarge), and it continues to rise. The exploitation of coal, oil, and gas in particular has enabled planet-wide industrialization, construction, and mass transport, the ensuing changes encompassing a wide variety of phenomena, which can be summarised under the following headings:
:: :: :: :: :: :: :: :: :: :: :: :: ::

Changes to Physical Sedimentation
Humans have caused a dramatic increase in erosion and the denudation of the continents, both directly, through agriculture and construction, and indirectly, by damming most major rivers, that now exceeds natural sediment production by an order of magnitude.

Carbon Cycle Perturbation and Temperature
Carbon dioxide levels (379 ppm in 2005) are over a third higher than in pre-industrial times and at any time in the past 0.9 million years. Conservatively, these levels are predicted to double by the end of the twenty-first century. Methane concentrations in the atmosphere have already roughly doubled. These changes have been considerably more rapid than those associated with glacial-interglacial transitions. Global temperature has lagged behind this increase in greenhouse gas levels, but temperatures in the past century rose overall, with the rate of increase accelerating in the past two decades. Temperature is predicted to rise by 1.1 °C to 6.4 °C by the end of this century, leading to global temperatures not encountered since the Tertiary.

Biotic Change
Humans have caused extinctions of animal and plant species, possibly as early as the late Pleistocene, with the disappearance of a large proportion of the terrestrial megafauna. Accelerated extinctions and biotic population declines on land have spread into the shallow seas, notably on coral reefs. The current rate of biotic change may produce a major extinction event. The projected temperature rise will certainly cause changes in habitat beyond environmental tolerance for many taxa.

The effects of these temperature changes will be more severe than in past extinction waves because, with the anthropogenic fragmentation of natural ecosystems, “escape” routes are fewer.
The combination of extinctions, global species migrations, and the widespread replacement of natural vegetation with agricultural monocultures is producing a distinctive contemporary biostratigraphic signal. These effects are permanent, as future evolution will take place from surviving (and frequently anthropogenically relocated) stocks. - Jan Zalasiewicz, et. al.
Sea-level change
Pre-industrial mid- to late Holocene sea-level stability has followed a 120m rise from the late Pleistocene level. Slight rises in sea level have been noted over the past century, ascribed to a combination of ice melt and thermal expansion of the oceans. The rate and extent of near-future sealevel rise depends on a range of factors that affect snow production and ice melt. In its latest report, the IPCC predicted a 0.19–0.58 m rise by 2100.

This prediction however does not factor in recent evidence of dynamic ice-sheet behavior and accelerating ice loss possibly analogous to those preceding “Heinrich events” of the late Pleistocene and early Holocene, when repeated episodes of ice-sheet collapse caused concomitant rapid sea-level rise. Current predictions are short-term, while changes to the final equilibrium state may be as large as a 10–30 m sea-level rise per 1 °C temperature rise.

Ocean acidification
Relative to pre-Industrial Revolution oceans, surface ocean waters are now 0.1 pH units more acidic due to anthropogenic carbon release. The future amount of this acidification, scaled to projected future carbon emissions, its spread through the ocean water column, and its eventual neutralization (over many millennia) has been modeled: projected effects will be physical (neutralization of the excess acid by dissolution of ocean-floor carbonate sediment, hence creating a widespread non sequence) and biological (hindering carbonate-secreting organisms in building their skeletons), with potentially severe effects in both benthic (especially coral reef) and planktonic settings.
The sensitivity of climate to greenhouse gases, and the scale of (historically) modern biotic change, makes it likely that we have entered a stratigraphic interval without close parallel in any previous Quaternary interglacial. - Jan Zalasiewicz, et. al.
The scientists conclude that the Anthropocene might evolve into a “super-interglacial” , with Earth reverting to climates and sea levels last seen in warmer phases of the Miocene or Pliocene, most likely achieved via a geologically abrupt rearrangement of the ocean-atmosphere system. Such a warm phase will likely last considerably longer than normal Quaternary interglacials. It is not clear that an equilibrium comparable to that of pre-industrial Quaternary time will eventually resume, they write.

Figure: Comparison of some major stratigraphically significant trends over the past 15,000 yr. Trends typical of the bulk of immediately pre-Holocene and Holocene time are compared with those of the past two centuries. Credit: Zalasiewicz J, et al., GSA Today.


Zalasiewicz J, Williams M, Smith A, Barry TL, Coe AL, et al. (2008), "Are we now living in the Anthropocene", GSA Today: Vol. 18, No. 2 pp. 4–8

AlphaGalileo: Man's impact on the planet brings about new epoch in earth's history - January 31, 2008.

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Study: biofuels industry added 10% to Iowa's GDP in 2007

A study prepared for the Iowa Renewable Fuels Association (IRFA) details the dramatic impact the growing renewable fuels industry has on Iowa’s economy. Biodiesel and ethanol production and the construction of new biorefineries proves to be a major force in driving Iowa’s economy forward, especially in rural communities. The sector added as much as 10% to Iowa's GDP in 2007. The report titled "Contribution of the Biofuels Industry to the Economy of Iowa" [*.pdf], was prepared by economist John Urbanchuk, a director with LECG, LLC.

Its main findings are that the sector has added substantial value to agricultural commodities produced in Iowa, has brough a large number of jobs, and has made a significant contribution to the state's economy. Based on the size of the biofuels industry at year-end 2007, ethanol and biodiesel:
  • Added $12.7 billion, or about 10 percent, to Iowa GDP
  • Generate $2.9 billion of household income for Iowa households
  • Supported the creation or retention of more than 96,000 jobs through the entire Iowa economy
  • Generated nearly $790 million in state tax revenue
Details are outlined in table 1 (click to enlarge).

Critics will say that these dramatic benefits are only possible because the sector is heavily subsidised (previous post). Moreover, it is unclear how heavy the indirect social and environmental costs of the mainly corn-based ethanol industry in Iowa are: the international effect of increased food prices, especially on the urban poor in maize importing countries, must be taken into account.

What is more, the potential local environmental costs - such as water depletion, nitrogen runoff, etc - as well as the effects of the complex "displacement effect" should not be underestimated. This displacement effect, which consists of indirect land-use changes, seems to be playing out in Brazil, where deforestation recently shot up in a rush to produce more soybeans as the U.S. shifts land from soy to corn (previous post). However, these effects are difficult to measure or to establish with certainty.

Nonetheless, the IRFA sees the numbers as proof of the fact that the biofuels industry is capable of bringing major local social and economic benefits:
Corn and soybean prices are up. Land values are up. Household income is up. State tax revenue is up. The common denominator is renewable fuels. John Urbanchuk’s report paints a dramatic picture of the far-reaching positive impacts of producing biodiesel and ethanol in Iowa. But the best news is that we’re just getting started. The new 36-billon gallon federal renewable fuels standard will drive the industry forward and Iowa will remain front and center. - Monte Shaw, IRFA Executive Director
Nationally, total ethanol capacity expanded 37 percent to 7.5 billion gallons. Iowa is the largest biofuels producer accounting for 31 percent of U.S. ethanol and 20 percent of biodiesel production capacity. At the end of 2007 Iowa’s 28 operating ethanol plants had operating capacity of more than 2 billion gallons and its 14 biodiesel plants had 318 million gallons of capacity. In addition, three ethanol plants are expanding production and 14 new ethanol plants and two new biodiesel plants are under construction. When completed, these new plants will increase Iowa’s biofuel production capacity by nearly 70 percent:
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With its new Energy Bill, the United States has set itself on a track to become a major biofuels producer that will ensure 20% of all transport fuel consumption comes from renewable, bio-based fuels by 2022.

Under the bill, the Renewable Fuels Standard increases to 36 billion gallons (136 billion liters) by 2022, roughly the equivalent of between 1.8 and 2 million barrels of oil per day. Of that amount, corn ethanol production is capped at 15 billion gallons per year starting in 2015 (56.8 billion liters), a three-fold increase of current production levels; the remainder is expected to be provided by 'advanced biofuels', the majority of which are cellulosic biofuels. In the final year of the standard (2022), cellulosic biofuels should contribute more (16 billion gallons) than does corn ethanol (15 billion gallons) (previous post).

In an earlier report, the Department of Agriculture (USDA) showed that the biofuels industry in the U.S. has brought farm income to all-time record highs. The USDA's Economic Research Service (ERS) showed in its annual Agricultural Income and Finance Outlook, that net farm income reached $87.5 billion in 2007, up $28.5 billion from 2006 and exceeding the 2004 record (more here).

John M. Urbanchuk, Contribution of the Biofuels Industry to the Economy of Iowa [*.pdf], report prepared for the Iowa Renewable Fuels Association, LECG LLC, January 2008.

IRFA: Renewable Fuels Power Iowa Economy ) New Study Outlines Dramatic Increases in Job Creation and Household Income as Renewable Fuels Industry Grows - January 31, 2008.

Biopact: US becomes biofuel nation as Congress approves Energy Bill - December 19, 2007

Biopact: Scientist: U.S. corn subsidies drive deforestation in the Amazon - January 04, 2008

Biopact: Subsidies for uncompetitive U.S. biofuels cost taxpayers billions - report -
October 26, 2006

Biopact: USDA: Biofuels lead to all-time record farm income in the United States - December 17, 2007

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