Summer vacation 1998.

As soon as final exams 

are over, two college 

students drive across 

several states to spend 

the summer with Mom

and Dad. About 150 miles

from home, they realize

the fuel tank is nearly

empty, and they have just

enough money to buy

gasoline to fill it. They’re

also hungry and thirsty.

Biofuelsnews

page 1

Fuel for 

Thought:

Our Bodies,

Our Cars

Volume 1, Number 3 Summer 1998

FOCUS ON...

Warren Gretz, NREL/PIX 06362

We all have to make choices about how to spend our

resources. And most of us have had—at least once—the 

difficult experience of having too few resources to meet our

needs. Sometimes we need to evaluate our resources (Do we

have enough after all?), or we need to analyze our needs

(Are they real or perceived, or do we need to revisit the

level of need?). The students might have determined that

they could make it home on, say, half a tank of gas, and still

have enough money to buy sandwiches and drinks. Or they

might have decided to fill the tank and arrive home extrahungry. On a more global level, there is some healthy

debate about whether the United States should use its vast

croplands strictly for growing food, or whether some of that

resource should be used to grow crops for fuel.There are

good arguments on both sides, and farmers will take the

choices seriously; after all, their livelihoods depend on

choosing correctly. As we present the options, we need to

carefully consider the nation’s needs and resources.

Why use crops for energy?

U.S. farmers have always planted energy crops of sorts.

Until the 1920s, about 90 million acres were devoted to

planting hay to feed horses and other draft animals. These

animals in turn provided energy to pull plows, wagons, and

other types of transport. Even after our society became

more dependent on internal combustion and diesel engines,

crops were used to make fuel for transportation (during the

1920s and 1930s about continued on page 2
1,200 fueling stations in the Midwest sold gasoline

with 6%–12% ethanol blends). In fact, Henry Ford

advocated using agricultural and other wastes to make

ethanol fuel, and in 1900 Rudolf Diesel demonstrated

his prototype engine on peanut oil.

From the 1940s to the present, petroleum-based

fuels have become deeply ensconced in the U.S. economy and culture. They are relatively inexpensive, reliable, and easy to obtain. But certain disturbing facts

remain: the United States imports more than 50% of its

oil for transportation, which makes for extreme strategic and economic vulnerability; and fossil fuels are

finite—they need millions of years to form, and known

resources have been seriously depleted during this

century. Crops, on the other hand, are sustainable.

They can be planted year after year, and can always

provide feedstock for fuels.

Should cropland be used to grow crops for food and fuel?

Few people would argue that the primary function

of agriculture is to grow food crops. But farmers now

grow less of some crops than they once did; in some

cases they need less land to grow the same crops; and

they have more options than ever about which crops to

grow. The reasons for these changes include: 

• The 1996 changes in farm policy (see “How Has It

FAIRed,” p. 5) eliminated Acreage Reduction

Programs and gave farmers the freedom to plant

various types of crops. 

• The United States is exporting much less grain than

it once did. Some countries, which in the past relied

heavily on U.S. crops to feed their populations, can

now grow enough to export. Argentina, for example,

now exports 10.5 million tonnes of corn annually;

China exports 4 million tonnes.

• Improved agricultural technologies, including bioengineered pest control, help farmers attain higher

per-acre yields.

• According to the USDA’s recently published

Agricultural Baseline Projections to 2007, land use

for traditional major field crop requirements will

rise from 261 million acres in 1997 to more than 

270 million acres in 2007, mostly because of increases

in corn and wheat. The report credits this increase

to crop producers’ responses to higher prices and

market returns. 

Another important factor is that, no matter which

crops are grown and harvested, there is waste associated

with them. Researchers at universities and laboratories

are working to improve the technologies to turn these

wastes into fuels. Additionally, some cropland is quite

marginal. So instead of using it to grow nutrient-intensive crops such as corn and wheat, farmers can plant

crops such as soybeans, which Warren Gretz, NREL/PIX 00305

Fuel for Thought (continued)

page 2

Printed with a renewable-source ink on paper containing at least 50% wastepaper, including 20% postconsumer waste.

continued on page 3

CON”Over time, an expanding agricultural

fuel market will mean that more and more

farmers will have a choice of producing food

for people or fuel for automobiles... [and] they

[farmers] are likely to produce whichever is

more profitable.”

Lester Brown, president, 

Worldwatch Institute

PRO“Our leadership should be driven both by

its very real concerns for the global environment,

and by the potential jobs and earnings which

could and should be generated by America’s

comparative advantages in farm production,

processing, and delivery.”

Dennis Avery, director, 

Global Food Issues at the Hudson Institute

Farmer and scientist examine switchgrass, a

dedicated energy crop for ethanol production.
Fuel for Thought (continued)

The New Uses Council (NUC) is dedicated to the

development and commercialization of new uses of

renewable agricultural products made from traditional

commodities and new crops.

“New uses” are promoted as environmentally 

friendly alternatives to current non-sustainable 

practices. New uses already reduce the importation and

use of petroleum in applications where non-polluting

alternatives such as bioplastics, bioenergy, ethanol, and

biodiesel are readily available. Other new uses, such as

kenaf paper and soymeal or rice, and wheat-straw composite building materials, already reduce the waste of

our forest resources.

NUC Goals are:

• By the year 2000, quadruple industrial and other nonfood demand for renewable agricultural resources

• Generate public demand for renewable-resourcebased industrial and nonfood consumer products

• Increase public and private investment in commercialization research, and in the development of

renewable resource-based industrial and nonfood

consumer products

• Make renewable-resource development a national

priority

• Capitalize on the tremendous potential of new

uses to increase manufacturing jobs and business

development.

For information about the NUC, to read the NUC newsletter, Evergreen, or to order NUC publications including

the Bioproducts Directory, visit the NUC Web page at

ag.arizona.edu/OALS/NUC/NUCHome.html, or contact

the NUC Chairman, Bob Harris, at the Nebraska Energy

Office: bharris@mail.state.ne.us.

page 3

help replace nutrients in the soil and can be used to for both food and fuel.

Or the land could be used for dedicated energy crops such as poplar trees

and switchgrass.

What’s the advantage of dedicated energy crops?

Properly managed, energy crops can reduce erosion and chemical

runoff, sequester carbon in the soil, and provide habitat for wildlife.

Almost any kind of plant can be used to produce fuel. The big question is

whether that can be done economically and in an environmentally safe

manner. According to the 1992 Agricultural Census, an estimated 291 million

acres of cropland in the United States (including acres idled for economic

and environmental reasons) are suitable for energy crop production.

There is no absolute solution

Because the United States has an abundance and variety of natural

resources, any effort to use one solution to resolve all its energy and 

environmental issues would be most unrealistic. However, the overwhelming evidence indicates that U.S. farmers could use a great deal of

land for energy crops, without using land that supports natural ecosystems

and endangered wildlife. It comes back to asking questions about

choices: Which resources are available? What are our real needs? What

kinds of technologies can we use? Which solution best meets our needs

given environmental and economic realities? If we can answer these 

questions, we will be well on our way to making responsible decisions

about using our valuable resources.

What is POLYSYS?

POLYSYS is a modeling framework

developed jointly by the University of

Tennessee’s Agricultural Policy Analysis

Center, the USDA’s Economic Research

Service, and Oklahoma State University’s

Great Plains Agricultural Policy Center. 

It provides a tool for estimating policy, 

economic, and environmental impacts 

associated with the agricultural industry.

POLYSYS generally simulates a 

5- to 10-year projection period; however, 

25-year projections have been estimated

and longer intervals may be supported. 

It can estimate agricultural production

response, resource use, and environmental

indicators in 305 geographic regions with

relatively homogeneous production 

characteristics. Users can trace price and

output paths associated with a specific

change scenario, and determine the direct

and indirect effects on other agricultural

and nonagricultural activities. 

IN THE SPOTLIGHT

What about the 

New Uses Council?
page 4

VICTORY...ISTEA passes as TEA-21!

On May 22, Congress passed the ethanol tax incentive through 2007. The 6-year federal highway reauthorization bill

passed both the House and Senate with overwhelming majorities. On June 9, President Clinton signed the landmark

transportation legislation into law.

This $217 billion highway bill, previously known as the

Intermodal Surface Transportation Efficiency Act, is now

called the Transportation Equity Act of the 21st Century

(TEA-21). The ethanol tax incentive will remain at the

current $0.54/gal of ethanol through the year 2000;

however, it will gradually be reduced to $0.53 in 2001, $0.52

in 2003 and $0.51 in 2005. Governor Frank O’Bannon (DIN), said: “We applaud House and Senate conferees and the congressional leadership for acting in a bipartisan manner

to ensure that domestically produced, renewable fuels continue to play a role in our nation’s energy mix.” And Ryland

Utlaut, president of the National Corn Growers Association, said, “This landmark legislation marks a major victory for

all Americans who will reap the benefits of cleaner air, new jobs, increased farm income, rural economic development,

lower fuel costs, and reduced U.S. dependence on foreign oil.” 

For more information on TEA-21, visit the web site at www.fhwa.dot.gov/tea21/index.htm.

Renewable Energy and Ethanol Promoted on Capitol Hill

Representative Dan Schaefer (R-CO), founder of the House Renewable Energy Caucus, was one of several speakers

at the third annual Renewable Energy Expo held May 21, 1998 on Capitol Hill in Washington, DC. He stated: “Every

year, more applications for renewable energy and energy efficiency technologies are being discovered and commercialized. And with continued research, development, and demonstration, these new technologies will prove to be as

common and reliable to our children and grandchildren as today’s conventional energy sources are for us.” The Expo

drew nearly 3,000 attendees and was an energetic gathering of government, industry, and the public. The exhibitors

displayed the latest renewable energy and energy efficiency technologies. Other speakers were former DOE

Secretary Federico Peña, Assistant Secretary of Energy Dan Reicher, Senator Wayne Allard (R-CO), and

Representative David Minge (D-MN). For a list of House Renewable Energy Caucus members, visit the web site at

www.biomass.org/memlist.htm.

OFD Resource Assessment Efforts

DOE’s Office of Fuels Development (OFD) is conducting biomass resource assessments at the national, regional,

state, and county levels to support planning efforts for biofuels research and development, and to understand and

identify opportunities for deploying biofuels technologies. They range from inventories to model-based cost-andsupply analyses.

Waste materials such as agricultural and forestry residues, pulp

mill wastes, and energy crops are assessed. Although these assessments are not generally conducted for a specific facility, several facility-specific cost-shared feasibility studies have been performed.

OFD’s Regional Biomass Energy Program works with state

agencies and others to conduct general biomass resource inventories

for Wyoming, Oklahoma, Nebraska, Colorado, Kansas, California,

Florida, and others. Additional assessments include forest residues

in Idaho, urban wood residues in Colorado and Michigan, and a

regional 13-state study of mill residues in the Southeast. At a more

local level, some assessments included

“I am pleased that the Act extends the ethanol

tax incentives through 2007. These are commonsense

investments that will help protect air quality, reduce

greenhouse gas emissions, and create new economic

opportunity for farmers.” - President Clinton

House 297-86

Senate 88-5 

continued on page 4 Biomass Feedstock Supply Curves: Year 2000

0

0

20 40

20

60 80

40

100 120

60

140 160

80

180 200

100

120

Feedstock Quantity (million dry tons)

Delivered Feedstock Price (1995 $/dt)

Ag Residue Softwood Wastes 

Switchgrass Short-Rotation Woody Crops 

Hardwood Wastes 
OFD Resource Assesment Efforts (continued)

The 1996 Farm Act (the Federal Agriculture

Improvement and Reform Act of 1996—FAIR) has 

fundamentally changed U.S. agricultural programs. 

It eliminated supply management, increased flexibility,

and changed financial support for contract crops 

such as wheat, corn, sorghum, barley, oats, rice, and

upland cotton.

FAIR transferred income variability risk from the

government to the farmers. Farmers must now manage

this risk by monitoring market forces and considering

alternative crop production. Annual Acreage Reduction

Programs were eliminated to increase farmers’ flexibility

to respond to market prices and make cropping 

decisions. This facilitated the gain in total plantings

and the shifts among crops seen during 1996 and 1997.

One way farmers can buffer this "risk" factor is to 

continue to use crop insurance. They can also diversify

production, contract in advance for future sales, 

integrate ownership, and involve more value-added

processing beyond the farm gate. 

The USDA Agricultural Baseline Projections to 2007

report focuses on the larger market orientation in the

domestic agricultural sector under FAIR, and how it

puts U.S. farmers in a favorable position for competing

in the global marketplace. Producers now respond to

signs from the marketplace rather than to government

commodity programs. This makes agricultural 

production economically more efficient. The agricultural

sector increasingly relies on the marketplace for its

income as direct government payments decrease (after

the year 2000 they will represent less than 3% of gross

cash income to farmers). 

Renewable Resources 2020, a coalition initiated by

the National Corn Growers Association, was developed

by the U.S. agricultural, forestry, and chemical communities to advance a vision for creating plant-based,

renewable products to replace current petroleum-based

products. Energy crops could provide the market

expansion needed to stabilize financial security for

farmers. Government crop requirements have been

lifted, so planting designated energy crops could 

provide security to farmers and to the nation. Also,

food, seed, and industrial uses are predicted to

increase, mainly because corn sweetener and ethanol

are being used more and more. The increase in ethanol

use may create a price signal that will stimulate further

ethanol production, which could

feasibility of corn residue collection in Kearney, Nebraska, and methodology and potential feedstocks for the

Philadelphia area. 

On the national level, OFD has developed supply curves for major biomass feedstocks—agricultural residues

(corn stover and wheat straw), forest hardwood and softwood residues, corn, and energy crops (hybrid poplars,

switchgrass, willows)—for the years 2000, 2005, 2010, and 2015, and extrapolated these curves to the years 2020 and

2025. Estimated agricultural residue prices include the cost of collecting the residues and a premium paid to farmers to compensate for nutrient losses, etc. Available quantities are adjusted for the quantities that must remain in the

field to maintain soil carbon levels and limit erosion potential. Softwood and hardwood forest residue supply curves

are estimated by updating a model originally developed by Alan McQuillan at the University of Montana, and

include sound deadwood, live cull wood, and logging residues. Estimated prices include costs to collect, process,

and transport the feedstocks, and a return for risk. Dedicated energy crop supply curves are based on the principle

that farmers need to earn at least the same profit from energy crop production as from other crops. A distribution of

agricultural cash rental rates is used as a measure of the profitability of the land when used to produce conventional agricultural crops. Energy crop yields are based on field trial results and expert opinion. Energy crop production

costs are estimated using Oak Ridge National Laboratory’s BIOCOST model, which estimates production costs for

seven major crop regions using methodology consistent with that used by USDA to estimate the cost of producing

conventional crops.

page 5

ON THE FEDERAL FRONT

How Has It 

"FAIRed"?

continued on page 6
news Biofuels

September 13–17, 1998

17th Congress of the World Energy Council and Exhibition

(Including Renewable Energy Pavilion) 

Houston, Texas

Contact: Susan Nelson, U.S. Energy Association, 202.331.0415

Web site: www.wec98congress.org

October 4–8, 1998

BioEnergy 98: International Biomass Energy Conference

Madison, Wisconsin 

Contact: Fred Kuzel 312.407.0177

Web site: www.cglg.org/projects/biomass/bioenergy98.html

September 20–25, 1998 

World Renewable Energy Congress–V

(Renewable Energy, Energy Efficiency, Policy and the Environment)

Florence Italy 

Contact: Professor Ali Sayigh, +44-1189611364, or e-mail:

asayigh@netcomuk.co.uk

Web site: www.wrenuk.co.uk/floren/floren.html

October 14–16, 1998

1998 International Renewable Energy Conference and Exhibition

Tokyo, Japan

E-mail: renewcon@mb.infoweb.ne.jp

How Has It “FAIRed”? (continued)

Upcoming Conferences and Events

Bulk Rate

U.S. Postage

PAID

Permit No. 258

Golden, Colorado

National Renewable Energy Laboratory

National Alternative Fuels Hotline

1617 Cole Blvd., MS 1633

Golden, CO 80401

in turn increase the market forces so farmers will invest 

in crops and more value-added processing for ethanol 

production. For more information about Renewable

Resources 2020, visit the web site at www.ncga.com.

FAIR has enabled farmers to expand their crop bases

and production possibilities—opportunities that that

have not yet been realized. But two factors may motivate

farmers to produce energy crops: (1) automobile manufacturers continue to increase their production of 

E85 vehicles; and (2) the draft E85 Action Plan (developed

by DOE’s Office of Technology Utilization) identifies

high-priority areas for E85 infrastructure development.

This economic niche is ripe for the farmers to harvest.

For more information on USDA baseline projections,

visit the web site at www.econ.ag.gov/Briefing/baseline

or call Paul Westcott at 202.694.5335.

page 6

DOE/GO-10098-581 For more information, contact the National Alternative Fuels Hotline at 800-423-1DOE.

Produced for the National Biofuels Program, Office of Fuels Development, U.S. Department of Energy

1000 Independence Ave., S.W., Washington, DC 20585-1121