Environmental Issues with Feedstocks for Biofuels and Biochemicals Don O’Connor (S&T) 2 Consultants Inc. SCA Sarnia, June 12, 2012

Environmental Issues with Environmental Issues with Feedstocks for Biofuels and Feedstocks for Biofuels and

Biochemicals Biochemicals

Don O’Connor

(S&T)2 Consultants Inc.SCA Sarnia, June 12, 2012

Sustainable Chemistry Alliance 2012(S&T)(S&T)22

Agenda

Sustainability Food vs. Fuel Indirect Land Use Change

The ModelsThe Evidence.

What needs to be done to close the gap? Other Fuel’s Indirect Impacts?


Introduction

Any new market participant represents a threat to the established industry players.

New technologies from new participants always face criticism as they represent a threat to the status quo.

So it has been with biofuels, and while biochemicals have so far flown under the radar, they too could face criticism.

The environmental benefits of biofuels has been questioned by many.




Bioenergy Sustainability

Europe has made this a requirement for biofuels and biofuel feedstocks that are sold in the EU.

Mandatory requirementsMinimum GHG emission reductionsNo new land, land must have been in production

before 2008. Voluntary schemes

Also looking at social issues and other environmental impacts

The devil is in the detail and in the interpretation of the requirements.


Bioenergy Sustainability

It appears that Canadian producers can meet the requirements, as they are currently interpreted, with minimum efforts.

ISO 13065 International effort to develop a standard for

bioenergy sustainability. ISO standards have to go through a WTO screen

so a successful standard should stop “criteria creep”

Not clear after 2 years if consensus on a standard can be reached.Comparability is a stumbling block.


Food vs. Fuel

This remains an emotional issue. In North America the food supply is arguable more

secure now than it was a decade ago.Next years crop is no longer dependent on

support from the government for this years crop.

In North America increased demand from population increases is met by increased yields.

People don’t comprehend that most agricultural land is used for feed production and not food production.


US Corn Demand

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

Mil

lio

n B

ush

els

Feed

Fuel

HFCS

Cereal

Beverage

Starch

Glucose

Seed use


US Corn Demand

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

Mil

lio

n B

ush

els

Production

Feed

Fuel

HFCS

Cereal

Beverage

Starch

Glucose

Seed use


The ILUC Hypothesis


The ILUC Hypothesis

The new land comes from pasture and forest. Both result in carbon emissions from working the

soil. Forests release the above ground carbon to the

atmosphere. The net impact is a large increase in GHG

emissions and the headlines that biofuels are more GHG intensive than gasoline or diesel.


The Models

Econometric models are used for the estimation of land use changes.GTAPMirageFAPRIFASOM

The models do a reasonable job of estimating the substitution effects.That is what they were designed to do.But most are static models and they don’t account

for changes in technology or demographics.


Some Results

CARB EPA IFPRI

Corn Ethanol

ILUC, g CO2eq/MJ 30 30 7

Land Converted, acres/1000 usg

0.73 0.85 1.25

Soybean Biodiesel



0.95 3.8 3.15

Sugar Cane Ethanol



1.35 0.66 0.52

IFPRI adjusted to 30 year time period for comparison


Some Results


Some Results


The Evidence

Biofuel production has increased dramatically in the past decade.

What has happened to land use? What has happened to land use change

emissions?


United States

Ethanol Production increased from 8 to 50 billion litres between 2002 and 2011.Agricultural land decreased.Forest land increased.Agricultural exports increased.

The various models all predict the opposite would happen.


Europe

Large increase in biodiesel production in the past decade.Agricultural land decreased.Forest land increased.

Also opposite to what the model are predicting.


Carbon Pools and Fluxes


Global Carbon Budget

Land Use Change

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

1959

1962

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

Pg

C/y

r

Land Use Change



Land Sink

-5

-4

-3

-2

-1

0

1

1959

1962

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

Pg

C/y

r

Land Sink



Land Use-Land Sink

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

1959

1962

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007P

gC

/yr

Land Use-Land Sink



Fossil Fuel + Cement

0

1

2

3

4

5

6

7

8

9

1959

1962

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

Pg

C/y

r

Fossil Fuel + Cement


What Needs to be Done to Improve the Models?

Many of the models guess what the yield on new land will be, and guess low, about 50% of the yield on existing land. The evidence suggests that the yield on new land is about

the same as on old land. The models don’t factor in the capital costs of land

conversion, even though they are economic models! As a result, for new land they choose between pasture and

forest based on the proportions of each available. The evidence suggests that 20 to 30 times as much pasture

will be converted compared to forest. Most models are about 2 to 1.

Uncertainty about carbon stocks on converted lands.


Land Databases

The models don’t have a good database of what land is available. Idle cropland is not a category in most models.Some models include this land in cropland in

some countries, include it as pasture land in other countries. There is no consistency even in the same models.

When idle land is included in the cropland category, the models can’t access it. They will choose pasture and forest land instead.


Idle Cropland

The quantity of idle cropland could be as large as 400 million ha. About one third of the utilized cropland.The change in harvested area between 2005 and

2011 represents 10% of the idle land. EU land requirements for biofuel were 1.8 million

ha in the IFPRI modelling of ILUC. No good estimates of double cropping potential,

nor can most models estimate this factor.


Dynamic Economies

The models are static models. They introduce a shock and look for the economy to change to a new equilibrium without the passage of time.

That is not how the real world works. What changes are we seeing over time?

There are big changes in the developed world in our eating habits.

The US eats 10% more meat per capita than it did 30 years ago but uses 20% less feed to produce the meat.


Meat Consumption and Feed Demand

0

50

100

150

200

250

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Mea

t p

ou

nd

s/ca

pit

a

0

500

1,000

1,500

2,000

2,500

Fee

d f

or

Mea

t, p

ou

nd

s/ca

pit

a

Beef Pork Poultry Fish Feed


Land Requirements for US Meat

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Hec

tare

s


Land Requirements for US Meat

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Hec

tare

s

20 million ha freed

80 billion litres ethanol


0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Lan

d f

or

Fee

d P

rod

uct

ion

, h

aLand Requirements for Canadian Meat


Indirect Effects Petroleum

Crude oil is refined to produce transportation fuels and light oils for heating.

The refining process produces a large number of co-products, some with high value and some with low value.

The low value products (residual oils, bunker fuels, petroleum coke, etc.) are generally burned to produce heat and power in large conversion devices.


Residual Prices

0

10

20

30

40

50

60

70

80

90

10019

83

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

US

$/B

BL

Residual Oil

Crude Oil


Indirect Effects Petroleum

Motor Gasoline22%

Jet Fuel5%

Kerosene1%

Distillate Fuel Oil39%

Residual Fuel Oil11%

Liquefied Petroleum Gases

4%

Other Products18%

Motor Gasoline

Jet Fuel

Kerosene

Distillate Fuel Oil

Residual Fuel Oil

Liquefied Petroleum Gases

Other Products


Estimate of the Magnitude

If there were no production of residual oil, what would be used instead?

LCA work done in Europe has used natural gas to replace the lost production of residual oil.

The emission credit for natural gas compared to residual oil is about 35 kg CO2eq/GJ.

At 15% of the barrel, the indirect effects of petroleum fuels amount to 5.2 kg CO2eq /GJ.Each crude oil and refinery would have different

indirect effects.


Outlook

Food vs. Fuel and ILUC arguments will continue to evolve. Issues are different in the developed world

compared to the developing world. Not sure that the indirect effects of fossil fuels will

be incorporated into the models.Even though it could be beneficial to the oil sands

emissions picture. There is a group of activists questioning the CO2

cycling benefit of biomass.This could be the next big issue, it has started

already in some regions for woody biomass.


Outlook

In the past several years there have been a lot of biofuel and biochemical processes developed that utilize “low cost sugars”What happens to the public support for the

bioeconomy if the “low cost sugars” are produced from corn?

If the bioeconomy is based on lignocellulosic feedstocks where does that leave agriculture when crop yields are doubled by 2030?


Thank YouThank You

Documents

Environmental Issues with Feedstocks for Biofuels and Biochemicals Don O’Connor (S&T) 2 Consultants Inc. SCA Sarnia, June 12, 2012