We’re using more ethanol, and using more corn in the process. Future growth of ethanol production, however, will depend on new technology to allow a shift away from corn, and other changes to affect demand, according to an article from the USDA’s Economic Research Service.

The article, in the agency’s new issue of Amber Waves, notes that the role of ethanol in the U.S. gasoline supply has grown from just over 1 percent in 2000 to 7 percent in 2008. The increased use of ethanol was fueled by a combination of market conditions and policy factors, including rising oil prices, Federal tax credits, the first Renewable Fuel Standard established under the Energy Policy Act of 2005, and the elimination of methyl tertiary butyl ether (MTBE) as an oxygenating gasoline additive.

Almost all ethanol produced in the U.S. uses corn as the feedstock. The portion of U.S. corn utilization used to produce ethanol rose from 6 percent in 1999/2000 to 24 percent in 2007/08 and is projected to range from 30 to 35 percent over the next decade. And while ethanol’s expansion has contributed to higher farm commodity prices, supply and demand adjustments in the agricultural sector have helped mitigate overall impacts.

The article notes, however, that constraints to future growth of the ethanol industry will present challenges to meeting the ambitious mandates for expanded biofuel use set forth in the Energy Independence and Security Act of 2007. New production technologies and supporting infrastructures will be needed, for example, to reach cellulosic biofuel mandates. Demand also is a factor, as most U.S. motor vehicles are restricted by manufacturers’ warranties to use gasoline containing no more than 10 percent ethanol.

A related article in the same issue outlines how policies affecting land use, in part tied to biofuels production, will play a critical role in controlling global warming. The author notes that agriculture is believed to emit greenhouse gases such as methane from livestock and nitrous oxide from fertilizer, and releases soil carbon through tillage and land use changes. However, agriculture and forestry also remove carbon dioxide (CO2) from the atmosphere and store it in soils and plant matter.

Efforts to limit atmospheric CO2 concentrations have traditionally focused on industries that refine or burn fossil fuels. But recent economic research suggests that limiting CO2 concentrations to low levels will require strategies that manage carbon emissions and sequestration from land use change as well as from the combustion of fossil fuels.

A recent study by researchers at the Pacific Northwest National Laboratory and ERS analyzed three hypothetical approaches for dealing with CO2 concentrations through 2095. Option 1 simulates land use if there were no policies limiting CO2 concentrations. Land use changes over time as population, agricultural productivity, and income change, but not in response to CO2 limitations. The other two options involve imposing taxes on CO2 emissions to limit atmospheric concentrations.

Under option 2, only fossil fuel emissions of CO2 would be taxed, with emissions from land use change ignored. The third option would tax all sources of CO2, including emissions resulting from changes in land use and land management. The results compare land uses, such as using land to grow crops, livestock, and trees, and the cost of limiting CO2 concentrations across the three options and for varying CO2 concentration targets.

Overall, land use change and costs are reduced when all sources and sinks of CO2, are considered, including agricultural soils and forests. Ignoring the value of carbon in forests and farmland leads to pronounced changes in land use as bioenergy is substituted for fossil fuels, and as cultivation expands to less productive soils. Under this scenario, land use for pasture, range and forests shrinks while acreage for biofuel crop increases dramatically.

Under all three policy alternatives, future improvements in crop productivity affect land use change and the cost of limiting CO2 concentrations. Technological advances in growing crops can reduce CO2 emissions as less cropland is needed to produce the same amount of food and bioenergy. Improved crop productivity has the potential to reduce CO2 emissions on a scale similar to capturing and storing CO2 emissions from electricity-generating plants.

The full issue of Amber Waves is available on line.