Relation of Biofuel to Bio Electricity and Agriculture

8/4/2019 Relation of Biofuel to Bio Electricity and Agriculture

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CHEMICAL ENGINEERING RESEARCH AND DESIGN 8? (2 00 9 ) 1 1 4 0 - 1 1 4 6

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Chem ical Engineering Research and Designjournal homepage: www,elsevier,coni/iocate/cherd

Relation of biofuel to bioelectricity and agriculture: Foodsecurity, fuel security, and reducing greenhouse emissionsv.M. -^', D.G. Choi^ D. Luo^ A. Ofeiuo^/.H.

School 0/ Industrial and Systems Engineering, Georgia Institute of Technology, Atlanta, GA, United StatesSchool 0/Pu blic Policy, Georgio Ins titute o/Technology, Atlanta, GA, United States

A B S T R A C TBiofuels arebeing developed in the context of three broad economic and policy drivers: reducing greenhouse gasemissions, increasing energy security, and supporting agriculture. Projections of the land and feedstock potentiallyavailable for bioenergy indicate tha t bioenergy developm ent could be resource limited, and food crops ma ybe partiallydisplaced by biofuel feedstocks. One motivation for biofuel development is to reduce greenhouse gas emissions,yet bioelectricity typically provides greater gre enhou se gas red uctions t ha n biofuel. Moreover, carbon p rices affectelectricity prices more than petroleum prices, Biofuel development can reduce petroleum supply risks, and therelative balance ofpolicy emphasis on climate change and petroleum security will shape the policies for biofueldevelopment.

2009 The Institution ofChemical Engineers. Published by Elsevier B,V, All rights reserved.Keywords: Biofuel; Bioelectricity; Policy; Agriculture; Clima te cha nge ; Energy sec urity

1. IntroductionLarge-scale biofuel production could have a significant effecton agriculture and patterns of land use. While energy secu-rity concerns may well justify the development of biofuels,the proposed scale of development has raised questions abouttrade-offs between biofuels and food crops, as well as betweenbiofuels and bioelectricity. In addition, the production ofbiofuels can have significant environmental impacts. Theseinter-related issues could constrain biofuel development, boththrough market prices for feedstocks and through policies thatmay directly or indirectly limit biofuel production.

Here we examine the scale of land use change that canresult from projected production of biofuels through 2022,as well as the concomitant land use change that can resultfrom projected production ofbioelectricity on the same timescale. With this land use picture as a starting point, we explorethe relative economics of growing food versus growing feed-stocks for biofuel, and we review the literature on the potentialimpact of biofuel development on food prices.

To the extent that there is a trade-off between decisionsto usebiomass feedstocks for electricity or fuel, greenhouse

gas policy and fuel security policy can have somewhat different implications. Whereas fuel security policy could promotebiomass used for fuel, greenhouse gas policy, if evenly appliedwould tend to promote the use of biomass with the lowesgreenhouse gas profile. We explore the relative greenhousegas impacts of bioelectricity and biofuel, and discuss how thgreenhouse gas profile of biofuels might be improved.2. Materials and methods2 . 1 . Land use impl icat ions o/bio/uelsThe European Union has proposed that biofuel p roduct ioncomp rise 10% ofEU t ransporta t ion fuel consumption by 2020With a tota l t ransporta t ion fuel use of 300 mill ion tonneas of 2007, this would require product ion of about 24 blion liters per year of biofuel (European Commission, 2007)There has been considerable controversy in the EuropeaUnion regarding the agricultural and envi ronmenta l impac tof biofuels, and reaching the 10% target remains unce rta inIn the United States, however, much larger amounts of biofuel product ion have been mandated. The U.S. Renewabl


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2 2 52 0 01 7 5

V 1503IbV 125 100Vc 75Vc e(A ^^3 250

Corn ethanol Corn ethanol cap* Total renewable fkjelAdvanced renewable t je l CeDulosic fuel- Biodieset Perlack et al.

1

2000 2005 2010 2015 2020 2025 2030Fig. 1 - Scenario for U . S . biofuel production, including past corn-derived ethanol production, the man dates contained in theEnergy Independence and Security Act of 2005, and the estimated production potential from Perlack et al. (2005).Fuel Standard, included in the December 2007 Energy Inde-pendence and Security Act (EISA), requires production of 136billion liters per year of renewable fuel by the year 2022,more than five times the proposed European Union produc-tion (F ig . 1 ) . This includes 6 1 billion liters of cellulosic ethanol,a maximum of 57 billion liters of corn-derived ethanol, 3 .8 bil-lion liters of biodiesel, and 15 billion liters from unspecifiedsources (EISA, 2007).

Production of one liter of corn ethanol requires 2 . 5 k g ofcorn {Shapouri et al., 2002). The average agricultural yieldof corn in the U.S. between 2004 and 2008 was 0,96kg/m^,although corn yields have been increasing approximatelylinearly for several decades, with an average increase of0 . 0 1 kg/mVyear (USDA, 2008b). If yields continue to increaseat this ra te, corn yields in 2022 would be 1.12 kg/m^ and the 57billion liters of corn-derived ethano l could be p roduced on 130billion m^ of land, about 40 % of the and currently devoted tocorn in the U.S.

For cellulosic ethano l, the land requirem ents can vary sig-nificantly depen ding on the feedstock. Among the feedstockscommonly discussed for widespread development in the U.S.,yield of biomass ranges from 0.5 to 1.1 k^m^ for switchgrass(Schmer et al., 2008), to 1.3 for loblolly pine (Williams andGresham, 2006), 2.2 to 3 for miscanthus (Heaton et al., 2008),and 3 for energy sorghum. Yields can be expected to increaseover time, although with th e choices of cellulosic ethanol feed-stocks as yet undetermined, the average yield still can beexpected tobe somewhere in the range of 0.7-3kg/m^. Higheryields are possible, as is the case for energy cane, but the w armgrowing conditions required for energy cane may limit its useas an ethan ol feedstock to the warm er regions ofth e U.S. orEurope.Both fermentation and thermochemical processes can beemployed in the production of cellulosic biofuels. For fermen-tation processes, theoretical ethanol production potential istypically in the range of 0.38-0.4I/kg of dry biom ass 0echura,2006). This theoretical yield does not take into account loss

due to carbohydrate consumed by the yeast, and non-ethanolproducts p roduced by the yeast; actual yields are in the rangeof 60-90 percent of the theoretical yield. Ethanol production

T o meet the U . S . biofuel ma ndate with a yield of 0 .37 liters o ffuel per kilogram of biomass, production of the 6 1 billion litersof cellulosic eth anol, requiring 160 billion kg of biom ass, canbe expected to require anyw here from 55 to 230 billion m^ ofland. Overall, with the 15 0 billion m^ for corn-derived ethanol,55-230 billion m^ for cellulosic ethanol, and on the order ofanother 50 billion m^ or more for the biodiesel and additionalrenewable fuel, total biofuel land use can be ex pected to be inthe range of 250-450 billion m ^ of land. Current U . S . cropland is1 3 0 0 billion m ^ (USDA, 2008b), and tota l U . S . timberland is 1700billion m^ (USDA, 2008a), so the biofuel manda te couM be metwith an amount of land in the range of, for example, 13 % ofcurrent U . S . cropland and 10 % of U S . timberland. In addition,there is 2400 billion m^ of U . S . pasture land, some of whichcould potentially be used for bioenergy feedstock production(USDA, 2009). Forest and agricultural land areas in the Euro-pean Union are somewhat comparable: total EU-27 forestedland is 1770 billion m ' (F A O , 2005) and total agricultural landis 1800 billion m^ (Eurostat, 2008). The implications of usingsome 10-15% of both cropland and timberland for bioenergywill be explored in the following sections.

To mee t the policy goals for bioenergy prod uction, Europeand the United States could draw on both domestic and inter-national m arkets for feedstocks and fuels. There is significantpotential for production in South America, India, and otherregions. Alfstad concluded that global production of biofuel islimited primarily by the capacity to convert biomass to fuel,rather than by biomass feedstock availability per se, and thatby 2030, as much as 30 % of global biofuel production could beproduced outside of Europe, the U . S . and Brazil (de Vries et al.,2007; Alfstad, 2008). Studies of global bioenergy p oten tial haveconcluded that on the order of 10,000 billion kg of biomassfeedstock could be available for cost-effective electricity orfuel production; this is more than an order of magnitude morebiomass than the production discussed above for Europe andthe U.S. (Nakicenovic et al., 2000; World Energy Assessment,2004; de Vries et a l . , 2007). Global production of bioenergy feed-stocks could reduce bioenergy land use im pacts w ithin Europeand the United States, potentially by increasing the land use


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1142 CHEMICAL ENGINEERING RESEARCH AND DESIGN 8 7 1140-1146

of renewable electricity production, particularly in regionswithout outstanding wind and solar resources (NREL, 2006).The European Commission has a goal of 55MToe from bio-electricity by 2010, which would require approximately 170billion kg/year of dry biomass, as well as the use of 75 MToeof biomass to provide both residential and district heating,requiring another 230 billion kg/year of biomass (EuropeanCom mission, 2005).

In the U nited States as of 2009, 27 states and the D istrict ofColumbia have implemented renewabfe electricity standards,which require an increasing percentage of a state's electricityto be produced from renew able sources (US DOE, 2008e). Biore-fineries have potential for contributing to renewable electricitypolicy goals, by producing some electricity for export. For thepurposes of energy and environmental assessment, a cellu-losic biorefinery model has been developed that projects anelectricity export of 0.2kWhe/kg biomass input (Aden et al.,2002; Sheehan et a!., 2004). With this electricity production,60.6 billion liters of cellulosic ethanol would be accompaniedby export of 40 billion kW he, equal to 2% of current U.S. elec-tric generation from coal (US DOE, 2008b). Although helpful inthe dev elopment of renewable sources of electricity, demandfor renewable electricity in the range of 20% or more will con-siderably exceed that provided by biorefineries.One of the simplest and currently most accessibleapproaches to generating electricity from bioma ss is to co-firebiomass with coal. Facilities with existing coal-fired boilersare well suited for biomass co-firing of up to 10-15% sinceonly minor modifications are needed for biomass handling,storage, and feed systems (US DOE, 2004; Fernando, 2005;NREL, 2006; van Loo and Koppejan, 2008). The retrofit costs for

bioma ss co-firing varies depend ing on different coal boilers,the biomass moisture content, and boiler delivery methods,and rang es from 10 0 to 1000/kW (lEA, 2007).Increased use of biomass to generate electricity wouldplausibly include a mix of co-firing of biom ass with coa l, devel-opm ent of dedicated biomass-fired utility boilers, as well aselectricity exports from biorefineries. To understand the mag-nitude of biomass possibly dedicated to electricity generation,consider a scenario in which 10 percent of coal consumed byutility plants is replaced by biomass. This could be achievedthrough a combination of co-firing biom ass with coal at exist-ing power plants, the conversion of some existing coal-fired

power plants entirely to biomass, and the installation of newbiomass-fired power plants. As of 2007, U.S. electricity gener-adon from coal was 2 trillion kwh/year, consuming 1 billiontonnes of coal (US DOE, 2007b). Coal used in U.S. coal-firedpower plants has a typical energy content (LHV) of 23.4 M]/kg(US DOE, 2007b), whereas dry biomass has an energy contentof roughly 16 MJ/kg. Replacing 10% of the coal with the equiv-alent energy value of biomass would require approximately0.15 billion tonnes/yea r of biom ass, implying a land use of any-where from 50 to 200 billion m^ of land.Greater use of cofiringor other direct biomass use for electricity generation wouldrequire correspondingly greater amounts of land.Adding the 250-450 billion m^ of land for biofuei feed-stock to the 50-200 billion m^ for bioelectricity indicates, withrounding, a potential land requirement for bioenergy in the

erably more than would be required to meet the current U.Sbiofuel mandate and to provide a modest amount of bio-electricity a s well (Fig. 1). This biom ass is projected to come75% from croplands and includes both agricultural residuesand dedicated bioenergy crops, as well as 25% from loggingresidues and other unmerchantable timber or low cost forestresidues.The magnitude of land use and accompanying envi-ronmental and ecosystem impacts of large-scale bioenergydevelopment suggests that low-impact feedstocks will behighly favored. High impact feedstocks, in terms of landuse per se, or accompanying impacts on nitrogen use andemissions, agricultural environmental impacts and ecosystemimpacts, may face significant policy obstacles (Fargione et al.2008; Searchinger, 2008).2.3. Effects of biofuel and bioelectricity on agricultureThere has been considerable concern that biofuel devel-opment could displace food crops, raising food prices andpotentially reducing food availability in developing countries(Naylor, 2007). In 2008, a combination of rising fuel prices,increased food con sum ption worldwide, and diversion of cornto make fuel was blamed for increases in food prices world-wide. While ethanol production from corn has increased, theland devoted to corn has remained relatively constant in theU.S., suggesting that corn for feed and food ha s been displacedby corn ethanol. Some of this decrease may have been bal-anced by increased corn production in other countries.

At what price does production of bioenergy become moreeconomical than production of food or other products? Thiswill depend on the price of fuel, the price of food productsand overall biorefinery p roduc tion costs . Cellulosic biorefineryproduction costs are as yet unknow n, but some insight can begained by considering the relative economics of corn for foodand corn for ethanol, and the projected econom ics of cellulosicethanol production.

Assuming the ethanol market will be perfectly compet-itive in the long run, a simple calculation can be used todetermine the maximum price an ethanol refinery would payfor its feedstock. In perfectly competitive markets there arezero economic profits, and the breakeven pointthe point awhich revenue and costs are equalcan be used to estimatethe feedstock price at which an ethanol plant will remain inoperation.^ This type of calculation was previously developedby Elobeid et al. (2006) for corn-derived etha no l, and we extenit here for cellulosic biofuel feedstocks. Total revenues includethe sale of ethanol, sale of byproducts from ethanol productionand the various subsidies and credits for producing ethanolTotal costs include operating costs, capital costs and feedstockcosts (Eq. (1)).max feedstockcost = i>(0.66Pgas + Vc) + Pb - "(Cop + (1

Costwhere Pgas is the price of gasoline per liter, Vc is the value osubsidies or credits per liter of ethanol, Fb is the price receivefor coproducts per unit of feedstock. Cop are operating costper liter ethan ol, CK are capital costs per liter etha nol, i> is t


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Table 1 - Breakeven price for ethanol feedstocks.Corn-derived ethanol Celiulosic ethano l

Assumed e thanol price {/L)Subsidies (/L)Coprod ucts {/ton ne) DDGS and furfuralEthan ol y ield (17kg)Costs (/kg corn; /tonne stover)Capital costOperating costBreakeven price (/tonne com; com stover)

0.260.091200.400.040.03

110

0.260.209000.37

20S3

26 6Aden et al. (2002), USDA (2005, 20Sc). 1 euro = US$1.24.

As an illustrative example, we can calculate the maxi-mum price an ethanol refinery would be willing to pay forfeedstock under the se assu m ptions. Since unblended gasolineis a substitute for ethanol-gasoline blends, we can assumea consumer would pay at most the energy equivalent priceof gasoline for a liter of ethanol; ethanol has two-third theenergy con tent of gasoline. The average U.S. city retail price forgasoline in March 2009 was $2.00 (US DOE, 2008d) or 0.39/1.The U.S. federal tax credit for corn-derived ethanoi blendedwith gasoline is 0.09/1 ($0.45/gal) and the average price fora tonne of distiller's dried grain with solubles (DDGS) is 120($149) (USDA, 2008c). According to the USDA's 2002 EthanolCost-of-Production Survey, net of feedstock costs, operatingcosts for 21 dry-mill plants averaged 0.07/1 ($0.38/gal) andcapital costs for expanding existing plants averaged 0.10/1($0.50/ga]} (USDA, 2005). Assuming conversion rates of 0.4 I/kgcorn and coproduction of 0.30 kg DDGS/kg corn (Wang, 2007),the breakeven price for corn is 0.11/kg($3.67/bushel). In 2002,the average feedstock cost of surveyed ethanol plants was0.11/1 ($0.54/gal) (USDA, 2005) or 0.04/kg corn ($1.61/bushel)(Table 1).

This calculation shows that 2008 corn prices of $4 perbushel are n ear or above the break-even price for ethano l pro-duction.For cellulosic ethan ol, a similar calculation can be d one todeterm ine the breakeven price for cellulosic feedstocks. Usingeconomic projections developed at the U.S. National Renew-able Energy Laboratory (Aden et ai., 2002), incorporating the0.20/1 ($1.01/gaI) tax credit provided by th e 2008 U.S. Farm Bill,and including the sale of furfural - an indu strial chem ical andcoproduct of celluiosic ethanol production - the breakevenfeedstock price for corn stover is 266/tonne ($328) (Table 1).The relative balance between diversion of biomass feed-stock from food to fuel, and increased production will dependon m arket forces as well as on agricultural policies. The pro-duction of corn or any other feedstock can be expressed asa function of its price, the price of alternative crops, and thesupply elasticities. Specifically, the quantity of feedstock i canbe expressed as a function of its price p,, the price elasticity ofsupply fi, the price of alternative crops or land use s pj, and thecross price elastic ities f . In principle, the yield will be a func-tion of prices and elasticities, but in practice yield increaseshave been linear in time for many crops.

of corn appears to be low, with U.S. corn production largelyunchanged despite decades of price changes, both up anddown, but this may change as corn-derived ethanol produc-tion continues to increase.Despite the uncertainties, demand and supply models sim-ilar to Eq. (2) have been used to explore potential agriculturalprice increases from biofuel developm ent. One such study pro-jected that in the year 2020 with 40.9 billion liters (10.8 billiongal) of ethan ol production, corn prices increase by 7.6% over2007 levels (De La Torre Ugarte et al., 2007). A study using adifferent model found that for production of 55 billion liters(14.5 billion gal) of corn-derived ethanol in 2020, corn priceswould increase by 29% (Msangi et al., 2007). A key differencebetween these models is the adoption rate for celtulosic bio-fuel technologies; longer reliance on com as a feedstock forbiofuels im plies greater price increases for corn.Both these models assumed that cellulosic feedstock usehad no effect on the price of food. However, cellulosic energycrops can displace food crops on agricultural land, which mayaffect agricultural prices. A better understanding of the effectof feedstock choice and land use decisions on ag riculture willprovide a basis for developing agricultural and energy policyand practices.Low-cost bioelectricity will also require ow-cost feed-stocks; The 2009 US. average delivered coal price was 1.5/GJ($2/GJ), which corresponds to a delivered biomass price of23/dry tonne ($30/dry tonne). The U.S. DOE estimates thatthere is enough biom ass available in the U.S. to generate about3 GW of electricity at a delivered biom ass price of $1.25/GJ and

that 26GW could be generated at $2.50/GJ (Haq, 2002). Thisindicates th at gen erating significant am oun ts of bioelectricitywill put pressure on electricity and biomass prices.2.4. Greenhouse gas comparison o/bioelectricity andbio/uelsAs of 2006, average carbon dioxide emissions from coat usedin electric u tilities averaged 94.7 billion kg CO2 per quadrillionBtu (US DOE, 2008c). The average the rm al efficiency of U.S.coal-fired power p lants is about 33.5% (US DOE, 2000), and as aresult coal-fired power plants releas e on average about 0.96 kgC02/kWh of electricity.Coal combusted at U.S. coal-fired power plants, as of 2006,


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1144 C H E M I C A L E N G I N E E R I N G R E S E A R C H A N D D E S I G N 8 7 [ 2 0 0 9 ) 1 1 4 0 - 1 1 4 6For the model fermentation biorefinery, each kilogramof dry biomass produces 0.371 ethanol and an export of0.18kWhe (Sheehan et al., 2004). This electricity can beassumed to displace a typical U,S. electricity gen eration car-bon emission of 0 . 6 k g C02/kwhe, corresponding to a mix ofcoal, natura l gas and nuclear ge neration. Each liter of ethanol

can replace about 2 /3 of a liter of gasoline on an equal h eatingvalue basis, and each liter of gasoline em its 2 . 3 k g of CO 2 whencombusted. The carbon savings from the 0 . 3 k g of ethanolis 0 . 4 1 kg C02/kg of dry biomass, and the savings from the0 . 1 8 kWhe of electricity is 0 . 1 1 kg C02/kg of dry biomass, fora total carbon savings of 0 . 5 2 k g C02/kg of dry biomas s.

The factor of almost two difference between carbon sav-ings for basic bioelectricity production in comparison withbiorefinery ethanol production can be expected to providean ongoing interest in bioelectricity production, particularlygiven the relatively low cost and established technology forbioelectricity.This relatively low carbon balance of biorefineries couldpotentially be improved through carbon capture and seques-tration. 1\vo-thirds of the biomass carbon is released as CO2during the fermentation process (Eq, (3)).

2CO2 (3)This C02 emission corresponds to approximately 0 , 9 8 k gCO^/kg of dry biomass. If this carbon dioxide could be cap-tured and sequestered with energy that emits less than 0 .5 kgCO/kg of biomass input, biorefineries could provide a carbonsaving equal to or better tha n stan dard bioelectricity producedat existing power plants.Greenhouse gas emissions from the production of biofueland bioelectricity result from both the fossil energy input tofeedstock production and refining, and also from nitrous oxideand soil carbon impacts of land use change associated withbioenergy development (Fargione et al., 2008; Searchinger,2008), These additional greenhouse gas emissions, whichcould be substantial, accrue regardless of the end-use of thebiomass.

2 . 5 . Potential impacts of carbon pricesIf carbon is priced, either through auction of carbon em issionperm its, or through direct taxation, t he price of bioenergy willonly be affected to the exten t of it s greenhouse gas emissions,if bioenergy has lower lifecycle gre enhouse g a s emissions thanfossil fuels, fossil fuel prices will increase m ore tha n bioenergyprices.

The capital cost of coal-fired power plants as of 2007 isapproximately 1200/kW ($1562/kW) for sub-critical pulver-ized coal plants with HHV thermal efficiency of 34,3%, and1400/kW ($1841/kW) for integrated gasier combined cycle(IGCC) technology with HHV thermal efficiency of about 40%(MIT, 2007; U S DOE, 2007a). The price of coal delivered to U.S.electric power p lants in 2007 was roughly 30/to nne (averag-ing $36/short tonne) (US DOE, 2008f).With standard operation and maintenance costs andassuming a 30-year plant life, the levelized cost of produc-

Table 2 - Baseline levelized cost of electricity from apulverized coal power plant.Performance

Efficiency (% )Life time (year)CostTotal plant (/kW)

Investment charge (/kWh)Fuel cost (/kWh)O&M cost (/kW h)Total cost ( /kW h)

34.3 (HHV)3 0

1 2 0 00.00850.01240,00400,0249

in a gasoline production cost of 0.6/1 ($3.09/gal). Carbondioxide emissions from gasoline combustion include 2 . 3 2 k g /1(8 .79 kg/gal) from the gasoline itself, plus 0 , 3 1 k g /1 (l,18kg/gal)from refining for a total of 2 . 6 3 k g CO2/I gasoline (9 .97 kg/gal). Ithe carbon dioxide price was 20/ton ne C O 2 , the cost of gaso-line would rise to 0.65/1, an increase of 8 ,3% over the pricewith no CO 2 cost.This carbon price behavior suggests tha t carbon fees wouldaffect the price of electricity much more than the price of gaso-line, and thereby provides a greater incentive to use biomassto produce electricity rath er th an fuel.3. Results and discussionProduction of significant amounts of biofuel implies signif-icant land use change. Part of this will be from currentcropland, and part is likely to be from current timberland aswell as land th at is currently not used for crops or timber, suchas pasturelan d or, potentially, land th at h as been set aside foconservation. Land use impacts w ill affect export ma rkets, an dincreased production of agricultural crops to replace importswill affect land use worldwide.Because of the land requirements for bioenergy, agricul-tural policies can be expected to be a significant factor in

10 15 20 25 30 35C02 Price (F/tonne) 45 50


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CHEMICAL ENGINEERING RESEARCH AND DESIGN 87 (2 00 9) 1 1 4 0 - 1 1 4 6 1145the development of feedstocks for biofueis. Whereas biofuelfeedstocks present aneconomic opportunity for farmers andowners of timberland, thepotential for increased prices foragricultural goods will affect consumers and may drive agri-cultural policy.

To some extent, food production is insulated from bio-fuel production because some food crops are more profitablethan biomass feedstocks are likely to be. However, thecostof corn ethanol production relative to gasoline prices is lowenough that a considerable increase in production is feasi-ble. That is, for sufficiently high gasoline prices, corn-ethanolproduction is limited only by the capacity of ethanol refiner-ies. Although the cost of cellulosic eth anol production is as yetunknow n, projections of biorefinery costs indicate that bioen-ergy crops will also be able to compete favorably with foodcrops. However, it is at least equally plausible that low feed-stock prices will be needed to suppo rt early cellulosic eth anoidevelopment, and thus cellulosic ethanol refineries may bemore subject to agricultural economics tha n has been the casefor corn-derived ethanol.4 . ConclusionsThe development of biofueis is founded on policy and eco-nomic imperatives for energy security, and on the growingpolicy mandates for production of low-carbon electricity,as well as to a considerable extent to support agriculturaleconomies. While all three of these policy goals can supportdevelopment of a biofuet industry, large-scale biofuel devel-opment will potentially compete with renewable electricityproduction from biom ass, and with other ag ricultural and for-est products.Studies to date have indicated that competition with agri-culture can be moderated by an early transition away fromedible feedstocks. However, the land use implications of evennon-food feedstocks suggest that large-scale biofuel produc-tion will put pres sure on both agricultural and forest prod uctsmarkets.

Bioelectricity is already a widely used technology, w hereascellulosic biofuel production is still under development. Tech-nological progress could improve the relative greenhousegas benefits of biofuels versus bioelectricity, through bet-ter management of greenhouse gases at the biorefinery,and through improved energy efficiency in biorefinery pro-cesses.Broadly, however, of that land that will be devoted tobioenergy feedstock production, the trade-off between bio-fuel and bioelectricity can be characterized as a trade-offbetween policy emphasis on energy security - favoring bio-fuels - and policy emphasis on greenhouse gas emissionreduconfavoring bioelectricity.

AcknowledgementsWe thank David Koch, Michelle Long, John Muzzy, MatthewRealff, and John Wind for comments on the manuscript. Thiswork was supported by the Anderson Interface Fund of theSchool of Industrial and Systems Engineering at Georgia Tech,and by Chevron Technology Ventures.

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Relation of Biofuel to Bio Electricity and Agriculture