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Biofuel benefits for agriculture

Agriculture remains a potential beneficiary of efforts to ramp up biofuel production including cellulosic ethanol, says Henry Bryant, Texas AgriLife Extension economist.

He said the level of government support and commitment to biofuel, including subsidies and mandates, indicates likely continued growth of the biofuels industry.

Bryant, speaking at the Blackland Income Growth Conference in Waco, said cellulosic ethanol production is nothing new.

“It’s old technology, dating back to 1898.” Early attempts to produce cellulosic ethanol used hydrolysis to turn wood into fuel. About the best producers could achieve was 18 gallons of fuel per ton of wood.

During World War I, both the United States and Germany were working on cellulosic ethanol, but still produced only 50 gallons of fuel per ton of raw material. Japan produced cellulosic ethanol during World War II.

The process has changed, using acid as the catalyst to treat biomass and produce cellulosic ethanol. He said a current goal is to produce better enzymes.

Some processors use gasification, heating biomass to produce fuel.

“The energy requirement is high,” Bryant said.

Despite the obstacles, the United States and other governments are committed to biofuel production. “Government support in recent years has been intense.” The 2005 energy policy, the 2007 energy initiative, the 2008 farm bill and the Stimulus Act of 2009 all include biofuel mandates.

Bryant said the Environmental Protection Agency issued $385 million in grants in 2007, from funds available from the 2005 legislation. The 2007 act included funds for advanced biofuels, including grants for research and development. The advanced biofuels standard also includes a mandate to use a minimum amount of cellulosic ethanol. The goal is 16 million gallons a year by 2022. “That means we have to ramp up aggressively from zero.”

Some companies receiving those initial grants have gone out of business, but several remain viable and committed to developing biofuels from diverse raw materials.

A tax credit of $1.01 per gallon for cellulosic ethanol helps producers. Other incentives, including a blending credit, also encourage production. Even small ethanol producers benefit from some credits, Bryant said.

The Stimulus Act added more money to the pot, including research grants totaling $564 million for advanced biofuels production projects.

The department of energy has also chipped in, Bryant said.

Projects include several small-scale operations with production goals around 20 million gallons per year. Larger projects hope to produce 75 million to 100 million gallons per year.

Some of those larger efforts will use various agricultural raw materials or agricultural waste products. An Iowa project will use corn stalks and corn cobs as fuel stock. A Kansas project will use agricultural waste; one plant in Florida plans to use sugar cane, another bagasse, the residue remaining after sugarcane or sorghum stalks are crushed to extract juice.

Bryant said the projects in Kansas and Iowa are particularly interesting for farmers. “These are the most relevant for grain farmers.”

A Houston, Texas, company, Terrabon, uses municipal solid waste, sewage sludge, forest residue, wood waste and other biomass to produce cellulosic ethanol. That project could use 5 tons of biomass per day.

Other companies are using algae to produce renewable fuels.

Bryant said Canada, Brazil and other countries also have research and development projects underway to produce cellulosic ethanol.

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