Minnesota doubles down on biofuels

As a growing chorus of voices from all corners begin to question the benefit of agriculturally derived biofuels, Gov. Tim Pawlenty has signed into law a new biofuel mandate. The agriculture and veterans policy bill (SF 3683) mandates that by 2015, diesel fuels sold in Minnesota must contain at least 20 percent biofuel (B-20). The state currently requires diesel to contain 2 percent biofuel (B-2) but that must increase to 5 percent by May 1, 2009, and 10 percent by 2012.

Lessons learned from biodiesel’s shaky 2005 introduction in which many questioned the fuel’s cold-weather performance and more recent concerns regarding biofuels’ impact on global food prices and the environment have resulted in certain protections being added to the legislation. Mandates will ease during eriods of very cold weather to prevent the fuel from becoming viscous and causing engine problems. Another protection maintains that at least 5 percent of the B-20 must be derived from non-agricultural sources like algae, animal fats and used cooking oil.

Biodiesel, which is most commonly made from soybean oil, has not received the same amount of scrutiny as corn-based ethanol has in recent months. The new legislation also makes promoting and increasing ethanol production a priority. The legislation states that the commissioner of agriculture “shall work with representatives from the renewable fuels industry, petroleum retailers, refiners, automakers, small engine manufacturers, and other interested groups, to develop annual recommendations for administrative and legislative action.” One of the prioritized actions is to push for federal approval of E-20, a fuel blend of gasoline and 20 percent ethanol.

Two recent studies at the University of Minnesota tested E-20’s compatibility with older vehicles as well as driving performance with favorable results, but doubling production could be a disastrous proposition without alternative sources to corn. The best prospects for cellulosic ethanol – ethanol derived from plant stalk fibers such as wood chips, switchgrass and corn husks — puts profitable production at least five years away.

In the meantime, an increase in use of corn over the short term could drive corn and world food prices even higher, and a diminished harvest could exacerbate the problem. This year wet weather has delayed planting throughout the corn belt. The U.S. Department of Agriculture reports that in Minnesota, only 46 percent of the crop has been planted as opposed to 82 percent this time last year. Even worse, predicted yields are down 7 percent or more from last year, and the shortage will likely drive corn prices even higher. According to a recent article in the Christian Science Monitor, the latest USDA report on World Agricultural Supply and Demand Estimates, released last Friday, predicts season averages of $5 to $6 a bushel – above the $4.10 to $4.40 predicted for the 2007 crop – and projects that ethanol use will go up 33 percent.

A contingent of prominent Republican lawmakers recently requested that the Environmental Protection Agency reduce by half federal ethanol requirements that 9 billion gallons of corn ethanol be produced each year. For many in the agriculture industry the answer is simply to grow more corn.