brian jennings on ethanol

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Ethanol and Sustainability Plain Green Conference Sioux Falls, SD Brian Jennings, Executive Vice President American Coalition for Ethanol (ACE) September 26, 2008

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at Plain Green Conference 2008.

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Page 1: Brian Jennings on Ethanol

Ethanol and Sustainability

Plain Green ConferenceSioux Falls, SD

Brian Jennings, Executive Vice PresidentAmerican Coalition for Ethanol (ACE)

September 26, 2008

Page 2: Brian Jennings on Ethanol

About ACE • Public Policy

• Market Development

• Public Relations & Communications

• Grassroots Member Empowerment

Page 3: Brian Jennings on Ethanol

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.

Page 4: Brian Jennings on Ethanol

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

Page 5: Brian Jennings on Ethanol

About 60% of RFS fromadvanced biofuels.

Page 6: Brian Jennings on Ethanol

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.

Page 7: Brian Jennings on Ethanol

Timely Challenges

• Volatility

• PR issues; “food v. fuel,” land use changes, “good v. bad ethanol”

Page 8: Brian Jennings on Ethanol

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)

Page 9: Brian Jennings on Ethanol

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

Page 10: Brian Jennings on Ethanol

Record corn exports in 07/08

90% of U.S. corn exports used by other countries to feed livestock.

Page 11: Brian Jennings on Ethanol

Distillers grains from ethanol concentrate nutrients for valuable livestock feed

Source: 2008 Feedstuffs Reference Issue; Ingredient Analysis Table. RFA

Page 12: Brian Jennings on Ethanol

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

Page 13: Brian Jennings on Ethanol

More corn per acre…

Page 14: Brian Jennings on Ethanol

…and doing so with less fertilizer.

Page 15: Brian Jennings on Ethanol

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

Page 16: Brian Jennings on Ethanol

U.S. cropland erosion

Source: NRCS

Page 17: Brian Jennings on Ethanol

Ethanol’s Decidedly Positive Energy Balance

Btu of ethanol minus fossil energy used to make the ethanol

Page 18: Brian Jennings on Ethanol

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

Page 19: Brian Jennings on Ethanol

Climate Change Legislation to reduce

Source: Global Insight

Energy includes transportation, coal (electricity), and othermanufacturing.

Page 20: Brian Jennings on Ethanol

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

Page 21: Brian Jennings on Ethanol

U.S. ethanol production hasgrown since 2004….

and deforestationin Brazil has declinedduring the same time

Page 22: Brian Jennings on Ethanol

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.

Page 23: Brian Jennings on Ethanol

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.

Page 24: Brian Jennings on Ethanol

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

Page 25: Brian Jennings on Ethanol

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.

Page 26: Brian Jennings on Ethanol

www.ethanol.org