When the newest report from The Farm Foundation on rising food prices was released late last month, the topic of conversation among the study’s authors and a University of Nebraska public policy analyst shifted to cellulosic ethanol. The new generation of ethanol is being touted as the answer to the issues that come up when food—such as corn—is used for fuel.
And at least one state is driving demand for the new kind of ethanol—Pennsylvania became the first in the nation with a state-specific cellulosic ethanol mandate, according to Gov. Ed Rendell’s office.
Cellulosic ethanol, which can be made from corn stover, switchgrass, miscanthus and woodchips, would not compete with the country’s food supply, experts say.
So why not just continue to mandate corn-based ethanol? Well, some experts say the fuel made from food is putting a strain on the nation’s food supply and food prices—which brings us back to the Farm Foundation’s report.
The new report, “What’s Driving Food Prices,” features renowned economist Wallace Tyner from Purdue University. In the report, Tyner said increases in food prices are due to a combination of factors—and can’t be blamed on just one thing. The country’s shift from a surplus to a shortage of food, the weakening value of the U.S. dollar as well as the new link between agriculture—namely corn—and energy such as biofuels can all be blamed, he said in a conference call.
But cellulosic is different.
“As noted in both the ’07 energy act and then the ’08 farm bill, cellulosic is the new magic word,” said Brad Lubben, a public policy analyst from the University of Nebraska, in the same conference call. “What we first tried to solve with ethanol, we will now solve with cellulosic.”
What he means is some are looking to this new generation of ethanol as the answer. And Pennsylvania is the first to do so on a state level.
Pennsylvania’s Biofuel Development and In-State Production Incentive Act, signed by Rendell as part of the 2008-2009 budget, requires all gasoline sold in the state to contain 10 percent ethanol, once in-state cellulosic ethanol production reaches 350 million gallons—in other words, enough to support the mandate.
Corn-based ethanol requirements were left out of the legislation, according to Ethanol Producer Magazine.
“Pennsylvania can be to cellulosic ethanol what corn-based ethanol was to Iowa and the Midwest,” Rendell said in a press release from his office at the announcement of the new law July 10. “Pennsylvania has an abundant supply of cellulosic ethanol feedstocks, including switchgrass, woodchips, municipal waste and agricultural waste. This alternative fuel law ensures that Pennsylvania farmers and businesses will fully realize the benefits of these resources.”
“We all hope we can shift to cellulosic ethanol which won’t be quite as competitive with our general food system,” Tyner said in the conference call. But he thinks the technology is quite cheap enough—and tested enough—to make economic sense just yet. “The current situation with cellulosic is one that has great potential but the technology is not quite there to make it close enough to being economic that people are willing to make the very large investments that are required in these plants.”
But on the upside, “there are no greenhouse gas issues with corn stover and forest residues,” used to make cellulosic ethanol, Tyner said.
“It certainly is the promise of the future if it pans out,” Lubben said.