Abstract  Corn-based dry-mill ethanol production and that of its coproducts—notably distillers’ dried grains with solubles (DDGS)—has surged in the past several years. The U.S. feed industry has focused on the size of this new feed source and its impact on the U.S. feed market, particularly the degree that DDGS substitute for corn and soybean meal in livestock/poultry diets and reduce ethanol’s impact on the feed market. This study develops a method to estimate the potential use of U.S. DDGS and its substitutability for corn and soybean meal in U.S. feed rations. Findings demonstrate that, in aggregate (including major types of livestock/poultry), metric ton of DDGS can replace, on average, 1.22 metric tons of feed consisting of corn and soybean meal in the United States. Over time, DDGS may substitute for less corn and more soybean meal as the share of beef cattle consumption of DDGS declines slightly (although increasing in absolute terms), with offsetting share increases in dairy cattle, swine, and poultry. Feed market impacts of increased corn use for ethanol are smaller than that indicated by the total amount of corn used for ethanol production because of DDGS.

Abstract  The rapid growth of biofuels production, particularly in the United States, the EU, and Brazil, has had important implications for the global livestock industry-both by raising the cost of feed grains and oilseeds and by forcing onto the market a large supply of biofuel by-products, most of which end up in livestock feed rations. This article investigates the impact of an expanding biofuels industry on the mix and location of global livestock production. Surprisingly, we find that growth in the U.S. and EU biofuels industries results in larger absolute reductions in livestock production overseas than in those regions, due to the international transmission of grains prices which is offset locally by the lower cost of by-products. We also find that nonruminant production is cut more than ruminant livestock, because it is less able to use biofuel by-products in its feed rations. Implementing biofuel mandates increases cropland area, a large portion of which is estimated to come from reduced grazing lands. The biofuel producing regions are expected to reduce their coarse grains exports and increase imports of oilseeds and vegetable oils, while they increase their exports of processed feed materials. In sum, biofuel mandates have important consequences for livestock as well as crops, with net effects influenced by the important role of by-products in substituting for feedstuffs.

Abstract  Drawing on several years of fieldwork-based research on and in the “farmland investment space”, this paper argues that a combined reading of debates on assets and assetization in financialized capitalism and convention theory offers novel insights into the moral struggles associated with the transformation of farmland into an “alternative asset class”. It demonstrates that central to the assetization of farmland is the globally distributed effort to bestow it with a legitimate financial worth. While many financial actors paint the picture that farmland has an absolute or intrinsic value, and that this value can be “unlocked”, the paper demonstrates that farmland only gains its financial worth through collective yet contested practices of classification, valuation and valorization. This process has internal (related to the financial industry) and external (related to “society”) dimensions. Farmland only becomes a legitimate asset class if it can be meaningfully set in relation to other asset classes, and if the underlying “assets” generate legitimate returns to investors. At the same time, the legitimation of farmland as an “asset class” has been threatened by attacks of social forces such as NGOs, as accusations of immorality (i.e. “land grabbing”) have become major reputational risks for the supertankers of the industry – institutional investors. This notwithstanding, “capital” and its supporters have worked hard to overcome these internal and external barriers. Eventually, the case presented here allows us to problematize and repoliticize the often-invisiblized morality of finance, which is as much about “value” as it is about “values”.

Abstract  Two peculiar features of the market for renewable fuel are essential for understanding the welfare consequences of the Renewable Fuel Standard (RFS). First, the 10% limit on ethanol in E10 gasoline—the blendwall—makes the total renewable fuel mandate more costly. Second, the linkage among prices of different categories of renewable energy credits—RINs—makes the total renewable fuel mandate less costly. I simulate policy experiments in a model that captures both of these features. In the short run, I find that reducing carbon emissions using the RFS imposes welfare costs of more than $300 per metric ton of CO2.

Abstract  Achieving greater energy security by reducing dependence on foreign petroleum is a goal of U.S. energy policy. The Energy Independence and Security Act of 2007 (EISA) calls for a Renewable Fuel Standard (RFS-2), which mandates that the United States increase the volume of biofuel that is blended into transportation fuel from 9 billion gallons in 2008 to 36 billion gallons by 2022. Long-term technological advances are needed to meet this mandate. This report examines how meeting the RFS-2 would affect various key components of the U.S. economy. If biofuel production advances with cost-reducing technology and petroleum prices continue to rise as projected, the RFS-2 could provide economywide benefits. However, the actual level of benefits (or costs) to the U.S. economy depends importantly on future oil prices and whether tax credits are retained in 2022. If oil prices stabilize or decline from current levels and tax credits are retained, then benefits to the economy would diminish.

Abstract  Releases of greenhouse gases (GHG) from indirect land-use change triggered by crop-based biofuels hate taken center stage in the debate over the role of biofuels in climate policy and energy security. This article analyzes these releases for maize ethanol produced in the United States. Factoring market-mediated responses and by-product use into our analysis reduces cropland conversion by 72% from the land used for the ethanol feedstock. Consequently; the associated GHG release estimated in our framework is 800 grants of carbon dioxide per megajoule (MJ); 27 grants per MJ per year, over 30 years of ethanol production, or roughly a quarter of the only other published estimate of releases attributable to changes in indirect land use. Nonetheless, 800 grants are enough to cancel out the benefits that corn ethanol has on global warming, thereby limiting its potential contribution in the context of California's Low, Carbon Fuel Standard.

Abstract  Lifecycle analysis (LCA) metrics of greenhouse gas emissions are increasingly being used to select technologies supported by climate policy. However, LCAs typically evaluate the emissions associated with a technology or product, not the impacts of policies. Here, we show that policies supporting the same technology can 1 lead to dramatically different emissions impacts per unit of technology added, due to multimarket responses to the policy. Using a policy-based consequential LCA, we find that the lifecycle emissions impacts of four US biofuel policies range from a reduction of 16.1 gCO(2)e to an increase of 24.0 gCO(2)e per MJ corn ethanol added by the policy. The differences between these results and representative technology-based LCA measures, which do not account for the policy instrument driving the expansion in the technology, illustrate the need for policy-based LCA measures when informing policy decision making.

Abstract  This paper improves on existing methods of testing price links between biofuels, petroleum, petroleum products, and agricultural commodity feedstocks by incorporating information contained in the prices of Renewable Identification Numbers (RINs) that are used for biofuel mandate compliance. Theoretical equations are developed to show the role RIN prices can play in the relationships among energy, biofuel, and agricultural commodity prices. RIN price data are used (a) to infer values of fuels where market data are unavailable and (b) to define binding and non-binding mandate regimes. A specific empirical exercise exploits the RIN price data to conduct cointegration tests on high frequency data representing spot and futures prices relating to ethanol and biodiesel from February 2009 through March 2015, finding little evidence of short-term biofuel and petroleum product substitution during this period.

Abstract  The biofuel industry has been experiencing a period of extraordinary growth, fueled by a combination of high oil prices, ambitious renewable fuel standards, subsidies, and import protection. This rapid growth has important consequences for the US and global economies. In this paper, we examine these consequences from partial and general equilibrium perspectives. We first examine US biofuel policy backgrounds to determine factors which caused the boom in the ethanol industry in recent years. Then we use a partial equilibrium model to investigate the economic consequences of further expansion in the ethanol industry for the key economic variables of the US agricultural and energy markets under alternative policy options which might be used to promote ethanol production in the future. Finally, we extend our analyses to examine consequences of further biofuel production at a global scale. One of the important conclusions of the research regards the importance of the link between energy and agricultural markets that has now come into being. That linkage has profound implications for the agricultural sector globally.

Abstract  The Annual Energy Outlook 2006 (AEO2006), prepared by the Energy Information Administration (EIA), presents long-term forecasts of energy supply, demand, and prices through 2030. The projections are based on results from EIA's National Energy Modeling System (NEMS). The report begins with an 'Overview' summarizing the AEO2006 reference case and comparing it with the AEO2005 reference case. The next section, 'Legislation and Regulations', discusses evolving legislation and regulatory issues, including recently enacted legislation and regulation, such as the Energy Policy Act of 2005, and some that are proposed. 'Issues in Focus' includes a discussion of the basis of EIA's substantial revision of the world oil price trend used in the projections. Other topics examined include: energy technologies on the cusp of being introduced; mercury emissions control technologies; and U.S. greenhouse gas intensity. 'Issues in Focus' is followed by 'Energy Market Trends', which provides a summary of the AEO2006 projections for energy markets. The analysis in AEO2006 focuses primarily on a reference case, lower and higher economic growth cases, and lower and higher energy price cases. In addition, more than 30 alternative cases are included in AEO2006. Complete tables for the five primary cases are provided in Appendixes A through C. Major results from many of the alternative cases are provided in Appendix D. Appendix E briefly describes NEMS and the alternatives cases. 112 figs., 25 tabs., 7 apps.

Abstract  Ethanol demand depends on the crude oil price and domestic biofuel mandate, but the aggregate effect on consumer fuel choices and export demand is uncertain. The relationship between crude oil and ethanol price is complex, and the presence of policy driven domestic biofuel use (mandate) make the modeling of the world ethanol market challenging. A structural economic multi-market multi-region partial equilibrium model considering the complementary and substituting effects between gasoline and ethanol demand is developed. In this study, a kinked ethanol demand curve that reflects those relationships is used to depict ethanol demand. We further simulate two forward-looking alternative crude oil price scenarios to identify how the crude oil price interacts with ethanol use mandates and trace the consequences on the U.S. Renewable Identification Number (RIN) market. The study finds that, under high crude oil prices, the substitution effect might trigger a large increase in ethanol demand by the rest of the world and the U.S. and Brazil will be the key ethanol exporting countries. In the U.S., the overall biofuel mandate might become non-binding.

Abstract  This paper broadens the analysis of the interactions between energy and agricultural commodity markets by focusing on five major commodities: oil, natural gas, soybean, corn, and ethanol, and intends to provide more updated information regarding the degree of the connection among the markets. We estimate a DCC-MGARCH model to accommodate the dynamic and changing degree of interconnections among the five markets with respect to price levels and price volatilities. In doing so, we control for additional economic variables including oil and gas inventories, interest rate spread, exchange rate and economic activities. Our empirical evidence suggests that there are varying degrees of interconnections among the energy and agricultural commodities in the long term as well as the short term, but the interactions among the agricultural commodities and ethanol are generally higher than the interactions between oil and gas and agricultural markets. In addition, we reveal some weak evidence of commodity market speculation. The estimated conditional volatility correlations suggest that volatility spillovers among the markets were time dependent and dynamic.